PRIVATE BUSINESS

Mersey Tunnels Bill (By  Order)

Order for Second Reading read.
	To be read a Second time on Tuesday 12 March.

Oral Answers to Questions

TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS

The Secretary of State was asked—

Homelessness

Simon Hughes: When the Government will publish a national homelessness strategy.

Stephen Byers: We have announced the establishment of a new directorate within the Department to co-ordinate action to tackle homelessness. I have asked it to report to me as a matter of urgency on the steps that need to be taken to address this issue.

Simon Hughes: The House and the country will be glad that the Homelessness Act 2002 gives us the basis for moving forward, and we welcome the Government's initiative in that direction. Will the Secretary of State confirm that the record number of homeless families in temporary accommodation who are waiting for a permanent home will form part of the discussions between him and the Treasury about funding the strategy? Will he assure us that in cases of family breakdown, those who leave the family home, particularly because of fear of violence, will immediately be accommodated safely, rather than having a harrowing wait before they find alternative secure accommodation?

Stephen Byers: I thank the hon. Gentleman for his warm welcome for the Homelessness Act. I was pleased that it was the first measure introduced after the general election last June and that it got Royal Assent last week. The hon. Gentleman will be aware that we amended the Bill as it was going through the House to ensure that, where a relationship breaks down, the interests of children are put first, which is a positive change. The hon. Gentleman points out that, for a variety of reasons, the number of families in temporary accommodation is increasing, which is a matter for real concern. Young children are being denied life chances because they do not have somewhere that they can call their home. In facing the challenges in housing, we must ensure that we can deliver for those young children.

Glenda Jackson: Who will be responsible for monitoring the efficacy of the homelessness strategy? Will it be the homelessness directorate? Will my right hon. Friend ensure that any national strategy will incorporate what would work most efficiently within the Greater London area, which is a pan-London strategy in partnership not only with the Association of London Government but with the Greater London Authority?

Stephen Byers: My hon. Friend makes a very important point about the situation in London, particularly as it is clear that individual housing authorities alone cannot solve the deep-seated housing problems faced by London. There has to be a pan-London approach to the issue, and that is something that the newly established directorate is looking at carefully. We will be monitoring the strategy ourselves, but a variety of voluntary organisations will be looking closely at how we are delivering this important part of my Department's agenda. I believe that in this Parliament housing will move towards the top of the political agenda.

Julian Lewis: Does the Secretary of State accept that if he had spent a bit more time putting roofs over the heads of families who need them and less time giving house room to the likes of Jo Moore, we would not now have a situation in which the number of families in bed-and-breakfast accommodation has increased by 152 per cent. and the number of empty council houses in England has increased by 6,000 since 1997? What has he got to say about that sort of record?

Stephen Byers: The increase of 6,000 in the number of empty homes sounds significant, but what the hon. Gentleman did not say is that there are 750,000 empty homes in the United Kingdom, so perhaps 6,000 is not too many. As he should know, in last year's Budget we introduced measures to bring empty properties back into use, such as 100 per cent. capital allowances to convert space above shops into flats and a reduced rate of 5 per cent. for VAT on the cost of renovating homes that have been empty for over three years. We are taking action to deal with empty homes; the Conservative party in government did absolutely nothing.
	For the record, this Department and this Secretary of State are going to deliver on the housing agenda. As far as I am concerned, it is one of the top priorities, and Opposition Members will see the results in the very near future.

Stephen Hepburn: While I welcome the homelessness strategy, I hope that it will not apply to people whom councils have spent months trying to evict. Will my right hon. Friend assure us that when councils get rid of such tenants, they will not get in somewhere else through the back door as a result of the strategy?

Stephen Byers: My hon. Friend makes an important point. His constituency is just south of mine on the River Tyne, and we share similar problems, even if one football team is doing better than the other.
	Local authorities are being far more robust in dealing with tenants who make the lives of their neighbours hell. Those tenants are moving out of council housing into private accommodation, and a growing number of private landlords are taking on tenants who have been evicted. In many well-established streets up and down the country, private tenants are being installed, often on housing benefit, who make life hell for private owners. We want to consider a licensing system for private landlords so that they will have to deliver on their responsibilities.

Geoffrey Clifton-Brown: In considering his homelessness strategy, the Secretary of State will wish to think about the number of rough sleepers, which has been artificially massaged down. Is he aware of the press release issued by the Transport and General Workers Union on behalf of independent charities, which alleges that the rough sleepers unit used public money to pay for rough sleepers to stay in bed-and-breakfast accommodation and states that outreach workers were pressurised into not declaring the full number of rough sleepers? It also alleges that rolling shelter beds were left empty for a month before the count, and that four hostels had dining rooms turned into bedrooms—all to massage the figures down artificially. Will the Secretary of State announce today that he will hold an inquiry into that, and if he will not, will he accede to the request from Shelter and the Simon communities to hold a meeting to discuss the allegations?

Stephen Byers: What the hon. Gentleman has not said is that the methodology used in the rough sleeper count was constructed not by this Government, but under the Conservative Government in 1996. The voluntary agencies that conducted the survey followed the methodology agreed by that Administration. The hon. Gentleman may shake his head, but those are the facts. He does not like the facts to get in the way of his prejudices, but we all know that the Conservative approach to rough sleepers was well stated by a former Cabinet Minister who spoke about the inconvenience of coming out of the opera and having to step over people sleeping in the doorway. For the Tory party, rough sleepers are an inconvenience to be ignored—[Interruption.]

Mr. Speaker: Order. I call the next question.

Rail Services (East Midlands)

David Taylor: What recent assessment he has made of the need for new passenger rail services to relieve motorway congestion in the east midlands.

John Spellar: As my hon. Friend may be aware, we are currently conducting a programme of regional multi-modal studies, including several involving the east midlands region. The studies are assessing demand for all modes of travel to 2021, including public transport, road use and motorway congestion. Recommendations to Ministers are expected shortly.

David Taylor: I thank the Minister for that answer and for visiting north-west Leicestershire 11 days ago for a briefing on the national forest rail line project in my area and in south Derbyshire. When he receives the conclusions of the M1 multi-modal study for the east midlands, will he examine carefully any reference to that project in the light of the information that he has received? Will he do his best to arm-wrestle the Chancellor for the necessary funding, which is but a small fraction of the £60 billion rail investment announced two years ago? That investment works out at £100 million for each constituency, and a small amount would do a lot of good.

John Spellar: My hon. Friend makes a strong case for his constituency, just as he and representatives of his local authorities did when I visited his area. I shall bear in mind the comments that I heard then when we receive the multi-modal studies. My hon. Friend and his colleagues sought to tackle the issues in the interests of their constituents by considering new communities in the area and new modes of travel. We shall consider those issues in his and in other areas when we make our assessment of how to remedy the substantial under-investment that we inherited from the Conservative Government.

Patrick McLoughlin: I am sure that the Minister will have seen the letter that I received from the Secretary of State this week. I had raised with him the matter of the statement by the Strategic Rail Authority about East Midlands Parkway station. How can we take seriously anything from a Department that sends a letter to a Member of Parliament stating:
	"I understand from the SRA that the May 2003 opening date given in the Strategic Plan was an inadvertent error"?
	We are fed up with errors from this Department. When will we start to get some action, some true information, and proper apologies when people give us wrong information in the Chamber?

John Spellar: I am not sure whether the hon. Gentleman was asking for that particular project. He was probably not making his presentation in such an approachable way as my hon. Friend the Member for North-West Leicestershire (David Taylor). As I understand it, there was a straightforward error by the Strategic Rail Authority, for which it has apologised. In spite of the hon. Gentleman's protestations, we will certainly give the matter proper consideration, so as to extend travel opportunities, comfort and facilities for travellers right across the east midlands. I guarantee to the hon. Gentleman that I shall look into the matter for him.

Liz Blackman: Ilkeston is the only town of its size in the east midlands without a railway station. A project for a station there has been identified by the SRA and by a multi-modal study. The problem is the Trent junction signalling box, which needs to be upgraded before capacity can be improved. Unfortunately, that upgrading will not take place for quite some time. May I urge my hon. Friend to look at the issue, and to do all that he can to bring that project forward so that capacity in the area can be increased?

John Spellar: The Strategic Rail Authority and Railtrack are looking at a number of the constraints and bottlenecks in the railway system, in respect of which they could make a considerable cost-effective enhancement to facilities. That is extremely important because, previously, Railtrack seemed to be far more focused—although not particularly effectively—on the major projects, and did not look at running the system that it already had. We are already seeing a significant improvement in Railtrack's attitude and performance.

Rail Freight

Peter Duncan: What recent representations he has received on the expansion of rail freight.

David Jamieson: Both my Department and the Strategic Rail Authority regularly receive representations from interested parties promoting the expansion of rail freight. The scope of these contacts is wide ranging. I am sure that the hon. Gentleman is as encouraged as I am that, after years of decline, there has been a 20 per cent. increase in the amount of freight on the railway lines since 1997.

Peter Duncan: The Minister will be aware that the Government's target for the increase in rail freight is 80 per cent., and some 43 per cent. of that needs to be delivered through the completion of the west coast main line. What is the projected mix of passengers and freight on that line, given its crucial importance to the Scottish economy? Exactly when is it going to be rescued from its current state of chaos?

David Jamieson: The SRA is looking closely at the west coast main line with a view to increasing the amount of passenger and freight traffic. It may have been a temporary lapse of memory that caused the hon. Gentleman not to mention the substantial amount of funding that Scotland has derived from the rail freight grant, not least for the Nith valley project near his constituency, which received £1 million for the Thornhill loop in June 2000.

Gwyneth Dunwoody: Is my hon. Friend aware that, before we can encourage more freight on to the railways, we have to maintain our existing services? Will he please give an undertaking that the French Government will be told in no uncertain terms that firms in my constituency are about to go bankrupt because of the attitude of the French authorities to the constant pressure of people trying to get on to freight trains on the other side of the channel tunnel, and that that will not be allowed to continue because it is putting drivers and would-be immigrants at risk?

David Jamieson: I thank my hon. Friend for her justifiable concern in this important matter. The restrictions and their impact are of considerable concern to the Government. We are exerting pressure at the highest levels to get the French Government to restore the freight service without further disruption. The French Government have taken the extremely helpful step of changing French law to give United Kingdom immigration officials authority on the Eurostar while they are on French soil. Since February, we have even had the power to check the papers of those who are making internal journeys in France, which is an unprecedented extension of our powers. My hon. Friend raises important matters with regard to freight and they are being dealt with at the highest level by the Government.

Eric Pickles: I am afraid that the hon. Gentleman has misunderstood the question. The question was not about checking papers but about freight and people smuggling themselves on to freight trains. In a written answer to me dated 30 January 2002 the Minister promised that work to strengthen the fencing was under way and due to be completed by mid-February. He also said that he had received assurances that security measures and a police presence would be put in place. That increased fencing turns out to be little more than 3 m high, flimsy and little better than chicken wire. Not surprisingly, last week 200 m of that was pulled down and there is no sign of the French CRS police. It is little wonder that business is losing confidence. The Scottish whisky industry no longer uses the tunnel, large paper manufacturers no longer use the tunnel and major freight companies are going into bankruptcy. When will the Government do something about that? It is time that they ended the pointless civil war inside the Department, stopped attacking civil servants, and stood up for Britain rather than a departed spin doctor.

David Jamieson: I am afraid that the hon. Gentleman rather lost the plot at the end of his question. While the Government concentrate on the problems of the channel tunnel, he concentrates on the problems of personalties. Many of the matters that he just mentioned have been dealt with already. Unfortunately, he looked rather pleased when he said that some of the measures that had been taken were not working. The Government are concerned—[Interruption.] If the hon. Gentleman would stop wagging his finger for a moment and listen to what I am saying, it might be beneficial to the House. The hon. Gentleman is clearly rattled by the answer that he is getting and does not like it. I can assure him that the issues that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) raised in a serious manner in the context of current discussions are being addressed at the very highest level, and that many of the measures that we have put in place, or have asked the French to put in place, are working.

West Coast Main Line

Phyllis Starkey: What discussions he has had with the Strategic Rail Authority on the allocation of track space on the west coast main line between different operators.

John Spellar: The Strategic Rail Authority is leading a review, with the input of principal stakeholders, of the outputs to be delivered from the west coast upgrade, including an assessment of how capacity should be utilised to meet the requirements of the many different users of the line. The SRA is keeping the Department in touch with developments.

Phyllis Starkey: My right hon. Friend will be aware that my constituents, although pleased about the upgrade and its effect on inter-city services, are seriously concerned about Virgin having exclusive use of the fast lines and squeezing everyone else on to the slow lines. In particular, we are concerned about a deterioration in the county services that commuters use heavily in the mornings and evenings and about the loss of the Rugby to Brighton service north of Watford. Will he assure me that the Strategic Rail Authority will give proper consideration to the needs of all my constituents and those of my hon. Friends who represent Northampton and Watford, and not just consider the Virgin—

Hon. Members: Order.

Mr. Speaker: Order.

John Spellar: That was rather ungallant of Opposition Members as a serious point was being made. It is clear from this afternoon's proceedings that Opposition Members are not interested in making serious points on behalf of their constituents; they are interested only in point scoring.
	Two issues are involved here. One is the reduction in the number of paths while modernisation work is being undertaken on the west coast main line. As I understand it, that is having an immediate effect on the service to Gatwick and beyond that my hon. Friend described. Secondly, the Strategic Rail Authority is engaged in significant discussions—not only with Virgin and other train operators but with freight companies—about full use of the paths after modernisation of the west coast main line is completed.
	We need to consider how the questions that my hon. Friend raises will be dealt with. I accept that the service has been reduced in the short term, but in the meantime passengers will be able to change between the two services at Watford.

Chris Grayling: The Government have paid a great deal of attention to the west coast main line, but they have quietly dropped from their 10-year plan proposals to build crossrail and to upgrade the Great Western line. Is that related to the fact that, according to the Department's own forecast, public sector investment in the railways will be 30 per cent. lower in 2010 than it was in 1995?

John Spellar: That is fine cheek, coming from a member of a party that did nothing about crossrail when in government. We are working with the City, Transport for London and the Strategic Rail Authority to decide on the paths for the project. The project has always been long term and has nothing to do with the 10-year plan. We would not have to deal with the issue now if the hon. Gentleman's party had got on with it a lot earlier.

Andrew Bennett: Does my right hon. Friend accept that, although commuters in Greater Manchester are prepared to put up with a deterioration in the service while the west coast main line is being upgraded, they want the certainty that services will be restored to at least their former level, if not improved?

John Spellar: I will draw my hon. Friend's comments to the attention of the SRA, which, as I said, is involved in ongoing discussions with train operators and other operators on the line. As he fully understands and as he pointed out to his constituents, some disruption will occur while the line is being modernised, but there will be considerable improvements for rail travellers and a shift in passenger transport.

Planning Green Paper

Stephen O'Brien: What representations from environmental groups he has received concerning the planning Green Paper.

Sally Keeble: Quite a number of environmental groups have written to Members of Parliament, who have passed on that correspondence to Ministers. In addition, there have been more than 3,000 responses to the consultation exercise, of which about 2,000 were from environmental groups or their members.

Stephen O'Brien: Who in the Minister's Department will be available to assist in considering representations on the Green Paper from environmental groups, now that Jo Moore, Martin Sixsmith and Ian Jones are not available? More to the point, will she confirm whether Martin Sixsmith is or is not available, given that some dispute exists as to whether he officially resigned?

Sally Keeble: I hate to disappoint the hon. Gentleman, but the consultation exercise arrangement has always been that the responses will be sifted and analysed by external consultants on our behalf.

Bill O'Brien: Can my hon. Friend tell the House how many of the organisations that responded to the planning Green Paper raised issues about telecommunication masts and planning procedures relating to their location?

Sally Keeble: We have yet to analyse the responses. Most of them—about 2,500—have come in in the past week, doubtless in response to the campaign by environmental groups. We receive many submissions about telecoms masts and they are always considered very carefully. We also take up matters directly with some operators.

Anthony Steen: I entirely support the Government's approach to the sensitive environmental considerations associated with building 3.75 million new houses in Britain by 2011. However, how does the Minister reconcile that with a fast-track approach to major public building infrastructure works which downgrades the environment and regards it as of little significance? How does she square those two approaches to the environment?

Sally Keeble: The Green Paper repeatedly emphasises the fact that we take environmental issues and the importance of community involvement very seriously. It contains a number of recommendations that benefit community groups and the environment.
	The housing policies that are already in place will continue, including the use of brownfield sites. The infrastructure proposals will be the exception for major areas of infrastructure, and we believe that our proposals still enable community and environmental groups to have an input into the decision-making process. I underline the fact that we completely understand the importance of taking into account environmental considerations. I would argue that this Government's track record on protecting the environment is far superior to that of the Conservative Government.

Lorna Fitzsimons: Can my hon. Friend tell us whether there have been any submissions about the misuse of planning law by environmental groups when it is quite clear that the will of the people in an area is in favour of a development? Groups misuse planning law, especially on the village green issue, filibustering and wasting millions of pounds of taxpayers' money, when what is wanted is much-needed industrial development.

Sally Keeble: I thank my hon. Friend for that question. One of the aims of the planning Green Paper is to provide a system that is more transparent and is not held hostage by filibustering tactics, but that can be well used by community groups to enable them to put their views directly and not turn planning inquiries into what has been called a banquet for barristers.

Railtrack

Gregory Barker: What the estimated cost to date is of Railtrack being in administration.

John Spellar: We estimate that the total amount so far drawn down from the commercial loan facility—

Hon. Members: Where's Byers?

Mr. Speaker: Order. The House must come to order.

John Spellar: All I can say about that outburst is that it was one that they prepared earlier.
	We estimate that the total amount so far drawn down from the commercial loan facility, which is used for running the railway, together with the administrators' fees, is some £1.8 billion. That is an interim arrangement, and the administrator will shortly start the process of raising banking facilities to refinance the loan from the commercial sector. When that takes place, there will no longer be a direct call on taxpayers' money.

Gregory Barker: I listened carefully to the Minister's answer, but is not the real economic cost far higher? Taken together, more expensive financing, higher performance targets and tens of millions in lost efficiency savings will mean that the real cost of Railtrack administration will be £400 million this year, and more like £1.75 billion cumulatively to 2006. Given the Secretary of State's record for factual inaccuracy, would the Minister care to revisit his answer and tell the poor old British travelling public what the real cost of the Labour Railtrack fiasco will be?

John Spellar: I can tell the hon. Gentleman what the cost of Railtrack is. It is a failed privatisation. It did not have a clue about its own assets. It could not run its programmes. It went from £2.3 billion estimated expenditure on the west coast main line to between £6 billion and £7 billion and rising, and it was not able to organise its contractors. If the hon. Gentleman actually talked to the operators in the industry, he would know that they found Railtrack to be out of touch and incompetent. They have already seen considerable progress under John Armitt, who is a respected figure from the construction industry. There has been a change of attitude and a change of practice. Travellers will welcome that, because it is delivering the rail service that they want. By his question, the hon. Gentleman shows yet again how out of touch the Conservative party is on this issue.

George Stevenson: Does my right hon. Friend recognise that the process that led to the administration of Railtrack—both the ending of that debacle and the role played by the Secretary of State—has been warmly welcomed, especially by Labour Members? Is he also aware of the concern that creating yet another company—even one limited by guarantee—is bound to lead to more damaging fragmentation of the industry?
	Given that all the resources for our rail infrastructure are either dispensed directly or are guaranteed by the public purse, will my right hon. Friend give urgent consideration to the suggestion from the Select Committee on Transport, Local Government and the Regions that all the infrastructure should be incorporated in the Strategic Rail Authority?

John Spellar: My hon. Friend is absolutely right about the fragmentation of the industry. I am sure that he is pleased about the measures that the Strategic Rail Authority is taking to consolidate the operator side of the industry.
	Bids are currently being prepared for the infrastructure. One proposal is for a company limited by guarantee, which would provide an effective way of focusing Railtrack's successor on the operation and management of the infrastructure. Under Railtrack as it was, there was an absolute focus on short-term shareholder value, to the detriment of the travelling public and the rail infrastructure.

Peter Lilley: Is the Minister aware that the cost being suffered by my constituents is a one-third increase in delays since the effective renationalisation of Railtrack? They want a Secretary of State who will focus on making the trains arrive as rapidly as his information officers depart. They are not interested in those people; but how can they trust a Secretary of State who has seen resign—or has sacked, or disowned—the chairman of the Strategic Rail Authority, the chairman of Railtrack, the franchising director, and that other fellow, Winsor? All those people were appointed by the Secretary of State, or by his Government. How can my constituents trust him if he cannot retain the trust of those whom he appointed?

John Spellar: As well as giving an unmitigated endorsement to the old Railtrack, the right hon. Gentleman seems to favour the whole of the failed structure. I would expect the great majority of those in the industry to consider the new chairmen of the Strategic Rail Authority and Railtrack a considerable improvement, and indeed we are already seeing progress.
	That is not in any way to underestimate the difficulty of recovering from the considerable problems created by the structure introduced by the last Government. First there was the privatisation of the train operators, and the way in which it was handled; then there was the rushed and botched privatisation of the infrastructure of Railtrack, a company which, as we have seen, was wrongly focused on short-term shareholder value rather than the running of the system. We are considering how to improve the structural position, and we have already made considerable changes in personnel, to the good of the industry.

Dennis Skinner: Is the Minister aware that the British people were fed up to the back teeth with handing over billions of pounds to a few people in Railtrack? At some point, it had to stop. Let me suggest a precursor to the company going into public ownership—I hope that is the idea—and point out that, shortly, one or two other companies might be going for a song. Let me say this, to the fury of the Tories and the press: snap them up. It might result in a few top civil servants effing and blinding and all the rest, but we should not worry about that. The British people out there want to get rid of the way in which the railway companies were assembled by the Tories—lining the pockets of their friends—and make sure that travelling by rail benefits all the British people.

John Spellar: What I am sure the British public want, and what freight operators want, is a rail system that works efficiently and effectively. We will introduce the mechanism that will best ensure that. The key is that we do not start with any ideological predisposition towards one course or another—unlike the bunch on the Opposition Benches, who could see only one way. That is why they made such a mess of things.

Tom Brake: The Secretary of State was right to put Railtrack into administration, even though he waited too long and the process was badly executed. However, private consortiums will be running London underground for the next 30 years. Will the Minister explain why, if they fail to perform adequately, the next Secretary of State will not be able to terminate their contracts, or put them into administration?

John Spellar: Quite simply, if the consortiums fail, there will be provision for taking over their work. There must always be a default position. I hope that the hon. Gentleman and his friends on the Greater London Assembly will use what influence they have in Transport for London to urge all concerned to get on with the contracts and to start to deliver benefits for the people of London. The bodies involved should start getting in the investment that the infrastructure so desperately needs. The system will have to cater for a considerable number of extra travellers as a result of the million extra jobs created in the economy since the Government took office.

Regional Governance

David Lidington: What role regional assemblies will have in the determination of planning decisions and housing and transport policy.

Alan Whitehead: The forthcoming regional governance White Paper will set out our proposals for the functions of elected regional assemblies.

David Lidington: In what ways will abolishing a county council in Aylesbury so that powers can be transferred to a regional assembly in Guildford or Reading bring government closer to local people?

Alan Whitehead: The hon. Gentleman seems to be under the misapprehension that the purpose of regional government is to suck powers up from local government. I cannot guarantee that regional assemblies will draw no functions from local government, but any such cases will be very much the exception. Local government will remain the community champion and chief service deliverer, whereas regional government will lead in the development of the strategic vision for the region. Our programme of reform is about ensuring that local government deals with local services, that regional government deals with regional priorities, and that Westminster deals with issues of national importance.

Helen Jackson: Is my hon. Friend aware that regional bodies on both sides of the Pennines wholly support the proposal by Central Trains to reopen a tunnel for rail freight under the Pennines? That matter was commented on by the House a short time ago. Does my hon. Friend accept that, on strategic transport policies of that sort, it is crucial to take note of the wishes of regional bodies? Does he agree that they will play an extremely important role when they are fully established?

Alan Whitehead: My hon. Friend makes an important point. It is essential that accountable regional bodies take careful note of the benefits that can accrue to regions as a result of collaboration—both between regions, and with regard to projects within regions. My hon. Friend will have noted that the Green Paper entitled "Planning: Delivering a Fundamental Change" envisages that elected regional assemblies will take over strategic regional planning functions, among other things.

Patrick Cormack: Why did the Minister evade the question asked by my hon. Friend the Member for Aylesbury (Mr. Lidington), who suggested that the creation of these absurd regional bodies would lead to the demise of county councils? Will the Minister confirm that that is what would happen?

Alan Whitehead: The hon. Gentleman seems to have had something of a memory lapse. He should recall that the previous Conservative Government introduced a series of unelected regional bodies. They sucked power up into the regions, but they were not accountable. One of the purposes behind developing elected regional assemblies is to ensure that power is accountable, and is exercised at the appropriate level. Regional activities will be accountable at regional government level, and local activities will be accountable at local government level.

Derek Foster: Whatever powers are eventually devolved to regional assemblies, there is a growing feeling in the north-east—among sporting personalities and people in entertainment, as well as among politicians—that the area needs a strong regional voice. Will my hon. Friend say when we can expect the White Paper on the matter? Will he confirm that the timetable to which the Government are working would allow a referendum in the north-east before the end of this Parliament?

Alan Whitehead: My right hon. Friend makes the important point that in the north-east keen interest has been expressed from a variety of sources in the idea of an elected regional assembly. He can expect the forthcoming regional government White Paper to appear shortly. Among others things, it will set out the timetable for early referendums when the creation of regional assemblies on an elected basis is regarded as desirable.

Jeffrey M Donaldson: Whatever the future role of regional assemblies, what steps are the Minister and his Department taking to ensure co-operation with the Northern Ireland Assembly, the Scottish Parliament and the Welsh Assembly to bring about a strategic, co-ordinated transport policy for the whole United Kingdom?

Alan Whitehead: The hon. Gentleman should know that the Government, my Department and the devolved governments of the regions and nations of Great Britain undertake regular discussions on issues of mutual strategic importance. Those discussions are proving useful in terms of the sort of issues that he has raised.

Malcolm Moss: Does the Minister agree with the headline in a recent edition of the Local Government Chronicle, suggesting that the Prime Minister is selling the counties out? Will the Minister tell the House whether the Government intend to sell the counties out?

Alan Whitehead: Not only do we not intend to sell the counties out, but we intend to ensure that elected regional assemblies will be created only when people in the region concerned want those assemblies to be created on an elected basis. Therefore, the idea that there is a plan for the extinction of county councils, regardless of the popular feeling in the regions, is completely untenable.

Joyce Quin: I welcome my hon. Friend's determination and that of the Secretary of State to honour the manifesto commitment on the introduction of regional assemblies. I agree that it is not so much about creating an extra tier of government as about democratising an existing tier, and giving that tier back to the regions where it belongs. May I also press my hon. Friend on timing? Will he confirm that the publication of the White Paper will be accompanied by a proper period of consultation, and that legislation this autumn to pave the way for referendums will not be ruled out?

Alan Whitehead: I confirm that the White Paper will be published shortly, will contain substantial proposals about the functions and working of elected regional assemblies and will set out a timetable according to which discussions will take place. An opportunity will be provided for full consultation on the way forward set out in the White Paper.

Homelessness

Vincent Cable: What progress the bed and breakfast unit has made in reducing the number of homeless households in bed-and-breakfast accommodation.

Stephen Byers: In September last year, 12,500 households were in bed-and-breakfast accommodation, of which some 6,500 were families with children. I regard that figure as unacceptably high. Based on the advice of the bed and breakfast unit, I hope to be able to make an announcement on the steps that we intend to take to reduce this number in the near future.

Vincent Cable: What estimate has the unit and the Secretary of State made of the additional demand for bed-and-breakfast accommodation as a result of new Government regulations in June that will substantially increase the number of homeless people to be rehoused by councils? Does he not recognise that this will cause severe problems for councils such as mine that are chronically short of social housing? To head off the pending crisis, will he therefore speak to his colleagues in the Department for Work and Pensions about reforming the system of housing benefit to enable social landlords to lease private accommodation for the homeless?

Stephen Byers: The hon. Gentleman raises an important issue about the relationship between housing benefit and the use of accommodation. It is one of a range of issues that we are considering in the context of making an announcement in the near future on how we intend to tackle the increasing number of households and families with children in bed-and-breakfast accommodation. The number is going up dramatically and that has to be brought to an end, but in a positive way in terms of the good accommodation that we should be able to offer to those who have to suffer bed-and-breakfast accommodation. We take this issue seriously and we will be making an announcement in the near future.

Karen Buck: Is my right hon. Friend aware that the number of social housing units for rent in London has plummeted since the mid-1990s? Does he agree that supply is the key? Will he do what he can to ensure that we get a settlement from the Treasury to tackle not only the crisis in bed-and-breakfast accommodation but the equally serious crisis that underpins it of chronic overcrowding? It is twice as high in London as it is in any other part of the country, leading to catastrophic consequences for families with children.

Stephen Byers: My hon. Friend is a strong campaigner for decent housing for families with children. I would like to think that we will be able to respond positively to her representations and many of those made by my hon. Friends. It is a question of funding, and we are putting in additional resources. It is also a question of developers facing their obligations, particularly in London and the south-east. At present, we are able, through the planning process, to put obligations on affordable housing only where it is residential accommodation for which planning is proposed. It would make a lot of sense if we could put such an obligation on a commercial development that was proposed. We are consulting on whether such an obligation should be introduced.

Regional Governance

Anthony D Wright: What progress he has made on proposals for elected regional Government in England.

Nick Raynsford: We are making good progress. A White Paper on regional governance will be presented to Parliament by the Deputy Prime Minister as soon as it is ready. It will set out the Government's plans for taking forward our manifesto commitment on elected regional government.

Anthony D Wright: I thank my right hon. Friend for that answer, but I wished for a date to be given. There is lively debate in the regions on the pros and cons of regional government. Can my right hon. Friend tell us in broad terms what benefits he believes will flow to the regions that adopt the regional assembly approach? Furthermore, will the option for regional assemblies be open only to those areas that have unitary rather than two-tier government?

Nick Raynsford: As my hon. Friend rightly points out, a debate is taking place, with different views emerging in various parts of the country. It is our view that people should have the opportunity, through a referendum, to determine the appropriate outcome in their region. A number of regions feel strongly that there would be benefits in having an elected regional assembly to give greater regional focus to economic development and related policies and to introduce a proper democratic framework to govern the activity of organisations that are accountable only to Ministers or are unelected quangos. Those regions perceive clear benefits in having an elected regional assembly.
	As the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Southampton, Test (Dr. Whitehead), has already made clear, we will in our White Paper spell out the specific arrangements for the relationship of local government to elected regional assemblies where those are proposed.

John Butterfill: Is the right hon. Gentleman aware of the considerable need to review regional boundaries? The south-east Dorset conurbation, for example, has no road or rail communications worth talking about with the proposed regional seat of government. The Highways Agency now deals with this under a central southern region, shown on all its maps. Is the right hon. Gentleman now considering a central southern region?

Nick Raynsford: The hon. Gentleman has been around a long time and knows from experience that debates on boundaries are almost guaranteed to generate a long, protracted and not terribly productive outcome. For that reason, the Government have formed the view that it is right to work in the first instance on the basis of the government regions, as defined for the Government offices, which will provide sound building blocks. However, the hon. Gentleman will have to wait for the publication of the White Paper to see in detail how we propose to take forward the boundary arrangements for elected regional authorities.

David Clelland: If voting in the referendum for regional government dictates the end of the county council tier, what implications will that have in any future reorganisation of local government? Would not a further referendum have to be held before a future Government could get rid of county councils?

Nick Raynsford: As my hon. Friend the Under- Secretary made clear earlier, there is no agenda for the abolition of county councils, but we recognise the need to look at the relationship of local government to elected regional assemblies, where people determine through referendums that they want an elected regional assembly in their area. The precise way in which that will be handled will be spelt out in the White Paper.

Railtrack

Colin Breed: If he will make a statement on the progress towards establishing a company limited by guarantee to take over Railtrack plc's responsibilities relating to running the network.

Stephen Byers: The team that has been engaged by the Strategic Rail Authority to develop a bid based on the concept of a company limited by guarantee is currently preparing its proposal. All potential bidders are aware that the administrator and the Government would like to keep the period of administration as short as possible.

Colin Breed: I thank the Secretary of State for that response. What does the right hon. Gentleman expect the public expenditure required by the new company to be, and how much will be generated by private investment? Will that entail more moneys from the Treasury, over and above what has already been announced as part of the 10-year plan?

Stephen Byers: We shall have to await the business case that will be put by the bid team for the company limited by guarantee. Any bidder will have access to Government grant and track access charges and will be able to borrow on the financial markets on the basis of those two secured revenue streams. That is the current situation, but obviously the detail will depend on the proposal and the business case made by the company limited by guarantee or any other bidder.

Bob Blizzard: When my right hon. Friend next talks to Railtrack, will he ask whether something can be done about the Oulton Broad North level crossing? Because of an antiquated signalling system, the gates have to be lowered manually and are left down for five minutes to allow the passage of a two-carriage local train, thus blocking off one of the only two roads through the area. Does my right hon. Friend agree that we need an integrated approach if the proposal made by Anglia Railways for more trains between Lowestoft and Norwich is not to cause chaos on the roads?

Stephen Byers: As it happens, I know the Oulton Broad North level crossing extremely well. I was on my way to campaign for my hon. Friend in the general election last year—successfully, of course—and, as all campaigners will understand, I was running behind schedule and then the level crossing gates came down, manually. It was even more frustrating because I wanted to be with my hon. Friend. My hon. Friend has made an important point: we need to ensure that investment goes into the network. That includes the Oulton Broad North level crossing as well as the west coast main line.

Theresa May: The Secretary of State has an entire Department of civil servants at his disposal—although the number is falling by the day. He has external consultants to advise him on the planning Green Paper, external consultants to advise him on his relations with the City and, of course, external consultants to advise the bidder for the company limited by guarantee. Is the SRA's cost for putting together a bid for a company limited by guarantee counted as public sector investment?

Stephen Byers: The SRA is meeting the costs of the bid team from within its resources and will be accounted accordingly.

Theresa May: So it comes within the public sector.
	The Secretary of State told the House that total investment in the railways would be £64.9 billion over the next 10 years, but analysis shows that a third of that is accounted for by inflation, a quarter of it is double counting and a third of the remainder is ongoing renewals and maintenance work: so the real figure for investment for improving the railways over the next 10 years is not £65 billion, as the Secretary of State told the House, but less than £20 billion. Will the right hon. Gentleman apologise to the House, or does he just regret giving the wrong impression?
	As this is the last DTLR Question Time before the Easter reshuffle, I just want to say to the Secretary of State—goodbye.

Stephen Byers: There are important issues that need to be addressed. Whether it is the hon. Lady saying bye-bye to me, or me saying bye-bye to her, time will tell. Under the 10-year plan, £64.9 billion will be invested in the railways. Those are the figures and that is the money that will be invested. The hon. Lady should not rely on the comments made in some of the newspapers. Those are the figures and that is the amount that will be delivered. The important issue for the Government and for me is that, whereas the hon. Lady may reflect the priorities of the Westminster village, the Government and I will deliver on the priorities of the people of our country. Those priorities are improving our transport system, decent housing for our people, regeneration of our economy and ensuring that we deliver for all our people. That is what I intend to do, and that is what I shall continue to do.

Points of Order

Tim Loughton: On a point of order, Mr. Speaker. Hon. Friends and I have been tabling questions in recent weeks about the cost of sending British NHS patients for treatment in Germany and France. Over the past few days, we have received answers to those written questions, refusing us any information about the cost of that treatment on the spurious grounds of commercial confidentiality. The answers to further questions as to what constitutes commercial confidentiality are, apparently, confidential. Surely it is legitimate to seek details of whether taxpayers' money is being spent effectively, not only on those NHS escapees going to the continent, but for the 1 million-plus patients who remain on waiting lists at home. Could you give us your guidance on how we can get that information about taxpayers' money into the public domain?

Mr. Speaker: I am not responsible for ministerial answers.

Peter Lilley: On a point of order, Mr. Speaker. You may have seen in The Times today an article on the second page reporting that yesterday the Government organised what the paper calls a pre-emptive strike to discourage discussion of a proposal by a think-tank close to the Government to raise the basic retirement age to 67. You will have noticed that on the Order Paper yesterday there was a question specifically on that subject from the hon. Member for Pendle (Mr. Prentice), which was withdrawn. Could you make inquiries as to whether any improper pressure was put on the hon. Gentleman to withdraw that question; could you rebuke anyone, from the Whips Office or otherwise, who did that; and could you offer counselling and support to Labour Members who feel inclined to give in to pressure from the Whips to remove embarrassing questions from the Order Paper?

Mr. Speaker: I do not think that a proper point of order.

Animal Welfare (Journey to Slaughter)

Andrew Turner: I beg to move,
	That leave be given to bring in a Bill to require the Secretary of State, in setting standards for slaughterhouses, to have regard to the desirability of reducing the length and duration of animals' journeys to slaughter, and for related purposes.
	The Isle of Wight, the constituency that I am proud to represent, was fortunately free of foot and mouth during the last outbreak, although on 19 February last year the first of two contacts was identified on the island. Fortunately, we were given the all-clear, but why should contacts be identified as far apart as Northumberland and the Isle of Wight? Both cases had been dealt with at an abattoir in Little Warley in Essex.
	That is just the problem. As my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said:
	"The volume of traffic through any one abattoir has increased the risk of the virus spreading.
	As vehicles come from a wider geographical area to reach their nearest abattoir they then take the virus over a far wider area, meaning much of the country may be affected."
	Why must animals travel such long distances to slaughter? The answer is, first, because of the closure of many small abattoirs, and secondly, because many supermarkets demand that animals be slaughtered at slaughterhouses of their choice and not those nearest the farms.
	The hon. Member for North-West Leicestershire (David Taylor) introduced a ten-minute Bill in November with the objectives of limiting journey times, promoting local slaughterhouses and limiting the frequency of animals' journeys to markets. The Government had the opportunity to take up his proposals in both the Animal Health Bill and the document "England's rural future". Regrettably, neither of them mentioned the hon. Gentleman's proposals; hence my Bill, which takes a slightly different approach by considering why animals have to travel so far.
	A wide range of organisations, from Compassion in World Farming and the Soil Association to the Meat and Livestock Commission and the Countryside Alliance, recognise that small slaughterhouses have closed at an unprecedented rate and that supermarkets' dealings with farmers frequently require animals to be slaughtered far away from the farm. The result is, of course, considerable additional stress to the animals caused by long journeys, overcrowding, inadequate rest periods, lairage and drinking facilities, and by repeated loading and unloading.
	The indefatigable countryside campaigner Mr. Robin Page pointed out in 1999 that there were 1,000-plus slaughterhouses in Britain in 1980, with 44 having the capacity to kill more than 50,000 beasts a year; in 1999, however, thanks to the European Union fresh meat directive, there were only 416 slaughterhouses, with 78 killing more than 50,000 beasts a year. Mr. Page went on to say:
	"For humanely killed stress-free animals, slaughter needs to be as close to the farm as possible. Under the directive, the reverse has happened: with unnecessary closures, due to ridiculous hygiene regulations and unacceptable costs, animals are now being transported many miles to die."
	I want to stop that stress.
	Compassion in World Farming reports that we are down to about 300 abattoirs. As Mr. Page said, EU meat hygiene legislation has driven up costs to a point beyond the reach of many small slaughterhouses. The increased costs have arisen both because EU legislation has stepped up its requirements on veterinary supervision and because the EU has imposed a range of additional structural requirements on slaughterhouses.
	A number of steps need to be taken if a network of local slaughterhouses is to be re-established. The Government and the abattoir sector need to make a concerted attempt to prevent the closure of more local abattoirs and to secure the reopening of those that have closed. The Government should give careful examination to the ways in which we can give financial assistance to that development and encourage investment in small local abattoirs. They must negotiate with our EU competitors to secure a revision of EU meat hygiene legislation. Such revision must provide a more sensible balance between the need to achieve good hygiene standards and securing economic viability for small local abattoirs.
	Farmers and others who sell for slaughter should be encouraged to use an abattoir that is reasonably nearby rather then sending animals to a distant slaughterhouse. Those supermarkets that source their meat only from a few large abattoirs must be persuaded to alter that policy. They should be willing to source their meat from local abattoirs up and down the country, especially if it is for local consumption. Indeed, there would be little point in creating new local abattoirs if supermarkets refused to use them. Supermarkets want to be regarded as a responsible part of the food chain, so they should be prepared to facilitate a return to local slaughter, which will bring benefits in terms both of animal welfare and of disease control.
	I am pleased to say that the agricultural sector on the Isle of Wight is working towards the creation of its own local abattoir, which would prevent a two to three-hour journey by road, ferry and road again to mainland abattoirs such as that situated at Frome. I compliment the agricultural community on the island on its work, and especially the Isle of Wight county branch of the National Farmers Union, the Isle of Wight Partnership and the South East England Development Agency, which have all contributed to the plans. I also thank Lord Whitty for the interest that he has shown in those plans.
	Let us think how much easier it would be if the Government were fully behind shorter journeys from farm to table. The objectives of my Bill are to require the Government specifically to compare the stress of additional distance of transport with that of abattoirs, while reducing burdensome regulation; to adopt EU standard veterinary qualifications for those who inspect abattoirs—such qualifications are already acceptable, but we have to make them available for those who train in the United Kingdom; to assist in the recreation of small abattoirs, perhaps paid for by a standard headage payment across all slaughterhouses, instead of the bulk purchase scheme that exists at the moment and unfairly benefits large slaughterhouses; and to ban unreasonable trade practices in supermarkets.
	The Bill is an important animal welfare measure. Personally, I consider it a more important such measure than others that may come before the House in future weeks and months. The fact is that far more animals suffer every day from long-distance journeys to slaughterhouses and markets than will ever suffer from foxhunting, but I do not wish to make a partisan point on that subject. This is such an important animal welfare measure that I believe that it deserves the support of all parts of the House.
	I commend the Bill and I hope for the support of the House in introducing it.
	Question put and agreed to.
	Bill ordered to be brought in by Mr. Andrew Turner, Mr. Richard Bacon, Mrs. Helen Clark, Mr. Jonathan Djanogly, Mr. Jeffrey M. Donaldson, Mr. Peter Duncan, Mr. Adrian Flook, Jane Griffiths, Lady Hermon and Mr. Ian Liddell-Grainger.

Animal Welfare (Journey to Slaughter)

Mr. Andrew Turner accordingly presented a Bill to require the Secretary of State, in setting standards for slaughterhouses, to have regard to the desirability of reducing the length and duration of animals' journeys to slaughter, and for related purposes: And the same was read the First time; and ordered to be read a Second time on Friday 10 May, and to be printed [Bill 108].

Opposition Day

Steel Industry

Mr. Speaker: We now come to the main business. I have selected the amendment in the name of the Prime Minister.

Adam Price: I beg to move,
	That this House is gravely concerned about the Prime Minister's role in supporting LNM/Ispat International's contract for the SIDEX steel plant in Romania and is unimpressed with the explanations given hitherto; notes Lakshmi Mittal's non-domicile resident status and his donation of £125,000 to the Labour Party; condemns the Government's support for a company that is actively lobbying in the United States against the interests of the UK steel industry; notes the potentially devastating effect on the domestic steel industry posed by Mittal-inspired steel import tariffs imposed by the US Administration; calls for urgent action to be taken to help support the UK steel industry as a consequence of any US-imposed tariffs; urges the Prime Minister to publish guidelines regarding Government support for companies that are also substantial donors to the governing party; and demands a full public inquiry into the Government's support for the Romanian SIDEX steel plant deal.
	The motion was tabled in my name and those of my hon. Friends, and on behalf of the UK and Welsh steel industry.
	Like me, the Secretary of State comes of ironworkers' stock. His constituency suffered 1,000 job losses as a result of last year's Corus closures. I feel genuinely sorry for him that he has been chosen to answer on the Government's behalf on matters on which he was not consulted and over which he has no control. Yet again, the Secretary of State for Wales has been handed all the responsibility and none of the power.

Llew Smith: Will the hon. Gentleman give way on that point?

Adam Price: In a minute.

Llew Smith: Will he give way?

Adam Price: In a minute.

Llew Smith: rose—

Mr. Speaker: Order.

Adam Price: But the Secretary of State does have the choice—a very simple one: to defend his Government and his party's reputation, or to represent the people who elected him. If he will not stand up and defend Welsh industry and Welsh communities, there are many hon. Members on these Benches who are prepared to do so.

Llew Smith: The hon. Gentleman says that he is involved in this debate as a representative of the Welsh steel industry. Can he explain that remark, given that those who are closest to the industry—the trade unions—have dissociated themselves from the remarks that he has been making for the past few weeks? He is intervening not on behalf of the Welsh steel industry, but on behalf of the Welsh nationalist party.

Adam Price: I am sure that the Welsh steel communities will be proud of the hon. Gentleman's remarks. I do not want to get involved in an inter-union dispute, but we have received full support from employees in Allied Steel and Wire and the GMB. The GMB takes a different line from the Iron and Steel Trades Confederation as regards loyalty to the Labour Government.

Mark Tami: Will the hon. Gentleman give way?

Adam Price: I should like to make some progress, if I may. [Interruption.]

Mr. Speaker: Order. The hon. Gentleman says that he wishes to make some progress.

Adam Price: We demand answers from the Government on behalf of those who expect a British Prime Minister—a Labour Prime Minister, at that—to be batting for British workers, not supporting foreign business men. Throughout this affair, the Government have singularly failed to provide a satisfactory answer to the central question—why did a British Prime Minister put the full weight of the Crown behind a foreign company's investment in eastern Europe that will cost British jobs? That is the key question that the Secretary of State for Wales must answer in the Prime Minister's absence.
	It is shameful that the Secretary of State for Trade and Industry has not found the time to come to the House at this critical juncture for the steel industry. She is not so much washing her hair as washing her hands of the steel industry. She found the time to attend Mr. Mittal's reception in November, however.

Gwyneth Dunwoody: On a point of order, Mr. Speaker. As you know, the rules of the House allow copious use of notes. Nevertheless—apart from the fact that I personally feel that Welshmen should speak extempore—those rules dictate that hon. Members must not follow notes too closely.

Mr. Speaker: The hon. Gentleman is in order at the moment.

Adam Price: Thank you, Mr. Speaker.
	The Secretary of State for Trade and Industry has twice flatly refused to come to the House. At this of all times the steel industry is entitled to expect leadership from the Government, yet we see political cowardice of the most contemptible kind. The Government have tried to brazen and bluff their way out of the crisis. Downing street has issued a string of denials, discrepancies and dissembling. The Government's smokescreen of denial and fake indignation is designed to obscure the truth, but the key facts are clear.

Helen Jackson: The hon. Gentleman says that he—and, I suppose, his party—speaks on behalf of the UK steel industry. What are they doing to support the Secretary of State, the Prime Minister and other members of the Government who are pressing the United States Government to take action over US steel tariffs? We hear a lot of bluster from the hon. Gentleman and his party, but what positive action are they taking to support what our Government are doing to protect the jobs of my steelworkers, as well as those in Wales?

Adam Price: The hon. Lady will know that I am a fellow founding officer of the all-party steel group. She will also know that President Bush announced his intention to call a section 201 inquiry last June. What did the Prime Minister do? He wrote a letter 24 hours before the deadline was up, yet Mr. Mittal got his letter within four days of asking. All the British steel industry is asking of the Government is parity of esteem; surely it is entitled to that.
	The facts are clear. Mr. Mittal gave £125,000 to the Labour party. In July, the Prime Minister signed a letter urging Romania to sell its nationalised steel industry to Mr. Mittal's company. In November, Romania did so, after the European Bank for Reconstruction and Development had, at the Government's behest, given Mr. Mittal a loan. Labour has argued that there was no connection between the donation and the letter or the letter and the deal, and that the loan was also unconnected. The Labour party says that those are all coincidences, but I call coincidences that recur a pattern.
	Of course that was not the first time that the Government had helped Mr. Mittal; he received his first loan from the Government to buy a state-owned steel plant in Kazakhstan just months after he gave the Labour party £16,000 in 1997. That is part of a chain of coincidences, where favours are given to the Government or to the Labour party and favours are done in return.

Chris Bryant: Can the hon. Gentleman therefore explain why, on 9 March last year, the leader of the Welsh nationalist-run Rhondda Cynon Taff local authority, Pauline Jarman, met representatives of the Rhondda Cynon Taff bus and coach operators association to talk about extending their £4.5 million agreement; and why, only two weeks later in the run-up to the general election, the convenor of that group gave a £1,500 donation to the local Plaid Cymru party? Can he also explain why, two weeks after the general election, Plaid Cymru councillors on the local authority decided not only to extend the contract for a further year, but to give an additional 7.5 per cent.—

Mr. Speaker: Order. Interventions should be brief.

Adam Price: Unfortunately for the hon. Gentleman, I was given ample warning of that issue; it was raised by his colleague Councillor Robert Bevan in the scrutiny committee, but he immediately withdrew the allegation. Councillor Robert Bevan and the hon. Gentleman were opponents for the Labour party nomination and they are not on speaking terms, but if the hon. Gentleman were to speak to his colleagues in the Labour group, perhaps he would have better information. [Interruption.]

Mr. Speaker: Order. The hon. Member for Rhondda (Mr. Bryant) must be quiet.

Adam Price: The Government have made a concerted effort to confuse, conceal and conflate our understanding of this case, and the hon. Gentleman's intervention is an example of that. Line after line of defence has been demolished, as the Government have been forced to amend, to correct and to retract statement after statement.
	The Prime Minister said that LNM was a British company, which it is not. Those at Downing street argued that it was owned by a British parent company—another false statement. The Prime Minister's official spokesperson said that Mr. Mittal was a British citizen—he is not—and that the donation came after the election, but it actually came before. It was said that Mr. Mittal had given money to the Tories—another untruth that had to be retracted. It was claimed that the letter was signed after the deal was agreed—not true; a late bid from the French company triggered the letter. It was said that the letter was drafted and signed unchanged—wrong again. The original draft was written on 19 July including the words "my friend Lakshmi Mittal", which Jonathan Powell removed to avoid embarrassing the Prime Minister.
	We have been assured that the Prime Minister had not met Mr. Mittal bilaterally and did not know about the donation. Again, that is untrue. Mr. Mittal, according to his official spokeswoman, had met the Prime Minister on several occasions, most recently at a celebration dinner for 15 of Labour's biggest donors just weeks after the general election. Four weeks later, the Prime Minister signed the letter.
	Finally—it is such a long list that I am breathless with mentioning so many retractions—it was claimed that the Prime Minister writes frequent letters to heads of state on behalf of businesses, but when the BBC checked the list of countries, not one of them could confirm ever having received such a letter, and the Government have refused to provide any example, citing that familiar excuse—commercial confidentiality. Ten lines of defence have been uttered by the Prime Minister's official spokesman, but later retracted in one of the most appallingly inept cover-ups that this country has ever seen.

Ian Lucas: The letter written by the Prime Minister was requested by an independent civil servant, the British ambassador to Romania. Is not that the key fact in all this? Is the hon. Gentleman suggesting—it is important to be clear about this—that that gentleman was in some way acting at the behest of the Labour party? Will he make that clear?

Adam Price: We are familiar with this Government's strategy of heaping blame on officials when events turn against them and when information comes out that contradicts Government statements. The way in which Her Majesty's ambassador in Bucharest has been treated as the fall guy is appalling. If the hon. Gentleman is seriously suggesting that a member of the diplomatic service would take it on himself to have dozens of meetings with a business man without checking for ministerial approval, his understanding of the operations of the British state is different from mine.

Roy Beggs: Does the hon. Gentleman agree that, in accepting £125,000 from one of the wealthiest families in the United Kingdom, the Labour party has sold itself short?

Adam Price: I totally agree. It was crass and insensitive in the extreme of the Labour party to accept that donation from a Corus competitor at the same time as redundancy notices were being sent out to people in the Secretary of State's constituency. That is absolutely disgusting. Not only should we expect an explanation, but we deserve an apology, not for ourselves but for redundant and current steelworkers in the right hon. Gentleman's constituency.

Mark Tami: Has the hon. Gentleman seen the comments of the Iron and Steel Trades Confederation, the main union in the steel industry, praising the British Government for their fight against any American protectionist measures? Would it not be better if we concentrated on those issues, the real issues facing the steel industry, instead of this nonsense?

Adam Price: I will come on to the United States, as Mr. Mittal has clearly had a role to play there. I am not an apologist for the management of Corus, which has treated its workers appallingly, not least in the latest pay freeze.

Lembit �pik: Now that I get a sense of the general thrust of the hon. Gentleman's comments, will he, for my clarification, answer the following question? Has Plaid Cymru, at any stage in its history or, let us say, in the last 10 years, promoted a political point or campaign on behalf of an individual or organisation who has given a donation to Plaid Cymru?

Adam Price: I am grateful to the hon. Gentleman for his robust opposition to the Government, once again. For a new Member, he is a fine example of an Opposition Member who scrutinises the Executive without fail at every available opportunity.

Lembit �pik: rose

Adam Price: I crave the indulgence of the House; I want to make progress. I have been fairly generous in giving way.
	The hon. Member for Alyn and Deeside (Mark Tami) mentioned the United States. Of course, we know that Mr. Mittal has spent $600,000 in the USA lobbying for tariffs on steel imports. Mr. Mittal's closure in Ireland has already cost British steel companies millions of pounds in its knock-on effect on credit availability. Crucially, Mr. Mittal's Sidex plant, funded by the British taxpayer, is a prime example of the problems of the steel industry: an eastern European steel maker is selling steel in western European markets, subsidised in this case by the British taxpayer.

Nigel Beard: rose

Adam Price: I should like to make some progress. I hope that the hon. Gentleman catches your eye later in the debate, Mr. Speaker.
	Graham MacKenzie, the chief executive of Allied Steel and Wire, said:
	The fear is that the investment in the Romanian steel is going to lead to a surge in imports from Romania and that is going to damage steel producers in the UK.
	Mr. Mittal himself told The Times of India that he wanted to make the Romanian plant Europe's main steel producer and that he saw no future for manufacturing in the UK. Mr. Mittal is entitled to his opinion, but he is surely not entitled to the support of the British Government as he hammers another nail into the coffin of the British steel industry.
	The balance of trade in steel has collapsed in the past five years, under this Government. A surplus of 2.8 million tonnes in 1997 turned into a deficit of 1.2 million tonnes last year. That is part of the wider meltdown of manufacturing under this Government. For the first time, the amount of steel contained in manufactured goods imported into the UK is now greater than the amount that we are producing. It is no longer enough for the Government to shrug their shoulders, point to global overcapacity in the steel industry or blame the Corus management, as if Governments are now powerless to intervene to save jobs or support indigenous industry. The Government, as the Secretary of State admitted during Thursday's Welsh debate, could have opposed the merger of British Steel and Hoogovens and referred the matter to the competition directorate, as my party demanded in June 1999. The Government refused to consider that and told us that the jobs at Llanwern were safe. I recall the Iron and Steel Trades Confederation saying something similar. The Government could have intervened in the currency markets to bring about a more competitive exchange rate.

Llew Smith: Will the hon. Gentleman give way?

Adam Price: I must make some progress. I apologise to the hon. Gentleman, but I have been generous in giving way.
	The Government's policy of a high pound has led to a loss of more than 3 billion in export earnings over the past five years for the British steel industry. They could have found a Longbridge-type solution to the problems of Corus in south Wales, even supporting compulsory purchase as a last resort. Perhaps the problem is that Torfaen is not a marginal constituency whereas Birmingham, Edgbaston isat least, Torfaen is not marginal yet.

Roger Williams: I do not believe that the hon. Gentleman has yet addressed the question asked of him by my hon. Friend the Member for Montgomeryshire (Lembit pik). Has Plaid Cymru ever taken up the interest of someone who has made it a financial contribution? If he will not answer, we must assume that the answer is yes.

Adam Price: I am disappointed in the hon. Gentleman. As he is vice-chairman of the steel group, I should have hoped that he would use his valuable opportunity to address the concerns of the steel industry.

Simon Thomas: My hon. Friend is making a comprehensive case for why the Prime Minister should have spent more than 30 seconds reading the Mittal letter. Does he feel that the Prime Minister should spend more time on such matters than he takes to choose his shirt in the morning? Will he address the point made by two hon. Members from the Liberal Democrats, a party that has recently exerted undue influence on South Wales police in pursuit of a Member of the National Assembly?

Lembit �pik: On a point of order, Mr. Speaker. Is it in order for the hon. Member for Ceredigion (Mr. Thomas) to make accusations about individuals who are not in a position to justify themselves in a debate that has nothing to do with the police investigations into Mike German?

Mr. Speaker: The hon. Member for Ceredigion (Mr. Thomas) made an attack on a political party on a matter that has occurred outside the House. So far, he is in order, but I think that his intervention has ceased.

Adam Price: Let us drag the House back to steel, Mr. Speaker.
	Above all, the Government could have decided not to support, under any circumstances, an investment in an eastern European plant that would bring further competition to the British steel industry.

Llew Smith: Will the hon. Gentleman give way?

Adam Price: The Prime Minister

Llew Smith: Will the hon. Gentleman give way?

Mr. Speaker: Order. The hon. Member for East Carmarthen and Dinefwr (Adam Price) has said several times that he will not give way.

Mark Hendrick: He is giving way to his own side.

Mr. Speaker: Order. Let me chair the proceedings; it is easier that way.

Adam Price: I am grateful, Mr. Speaker.
	Rather than making half-hearted and empty gestures late in the day, in order to deflect criticism of his Government's double standards and inaction over the past eight months, the Prime Minister should have announced an emergency package of contingency measures to safeguard the future of the steel industry. We have known for eight months that tariffs were coming. Where have the Government been? Where has the Prime Minister been?
	The effect of the tariffs could be devastating, not just because of the loss of a market that was worth up to 500 million two years ago, but because a surge of cheap imports frozen out of the American market will flood western Europe, particularly the United Kingdom. That is where the Government should be concentrating their efforts. It will not be enough to do as the Secretary of State has said and refer the matter to the World Trade Organisationit could take years to receive an answer from that, and by then the British steel industry could be devastated. We need action now. We need a targeted package of measures and we need the Government to lobby the European Union in the strongest possible terms to introduce EU-wide tariffs against dumping by low-cost producers.
	In addition, the European coal and steel treaty is currently being renegotiated, and we need to reconsider whether the steel industry should receive targeted Government support in the form of investment aid under the new terms of that treaty.
	There were many factors that should have led to extreme caution being exercised and a thorough evaluation taking place before any help was given to Mr. Mittal, whether in the form of the Prime Minister's imprimatur or the loan from the European Bank for Reconstruction and Development. There was no evidence of caution or evaluation; indeed, there was an almost reckless commitment of effort and resources. The full endorsement of the British state was given to Mr. Mittal. After the Ecclestone affair, it is surely vital for the Government to avoid even the faintest suspicion that British Government policy could be influenced by donations.

Chris Bryant: Will the hon. Gentleman give way?

Adam Price: I am afraid not.
	The conduct of the Government has achieved the opposite effect: a persistent scandal and the loss of public trust. I note that the chair of the Labour party has said that
	those who do contribute overwhelmingly do so because of their desire to promote the values of the party they support.
	It is interesting to note the choice of language there: overwhelmingly, for example. The right hon. Member for Norwich, South (Mr. Clarke) clearly does not deny that some businesses try to buy access and action. In Mr. Mittal's case, it would surely be stretching credibility to suggest that he woke up one day and decided that he was a socialist.

Albert Owen: Now that the hon. Gentleman has moved away from the subject of the steel industry and is talking about donations, I will give him the opportunity to answer this question. Has his party received a donation from an individualyes or no?

Adam Price: I shall let the hon. Gentleman into a secret. I gave the party about 900 myself last week.
	Mr. Mittal operates in countries with some of the worst[Interruption.]

Several hon. Members: rose

Adam Price: I shall give way to the hon. Member for Preston (Mr. Hendrick).

Mark Hendrick: Is the hon. Gentleman suggesting that the Prime Minister went out of his way to support a foreign company in deliberately undermining the Welsh steel industry for a measly 125,000? [Interruption.]

Adam Price: I think I am getting somewhere here. Well done! Congratulations to the hon. Gentleman.
	In 1998, Mr. Mittal was involved in a political corruption scandal in Indonesiareported by the Financial Timessurrounding the privatisation of the former state-owned Krakatau Steel in west Java, under the Suharto Government. The former president of the board of directors of Krakatau Steel resigned in protest at what he called the mysterious way in which the sale was handled. As with the Romanian deal, the allegations centred on the under-valuation of the company and the secrecy surrounding the deal.
	Ispat bought a 55 per cent. stake in the company for $400 million, even though the directors of the company had negotiated the sale of a 25 per cent. stake to another company for $500 million. The directors were not consulted on the sale and, as in Romania, no one was ever allowed to see the contract, which according to a Financial Times report, was pocketed by the privatisation Minister, Tanri Abeng. The deal later unravelled when Abeng was indicted for corruption in two other privatisations. The clear implication was that Ispat had bribed Mr. Abeng into accepting their lower-value bid for Krakatau.
	In November, while Mr. Mittal was busy lobbying for tariffs against imports to the United Statesagainst the interests of the British steel industryhe applied for his Mexican subsidiary to be exempted. To say that this man was two-faced would be a gross understatement, but one of his faces would certainly be the unacceptable face of globalisation, involving business without passports, without borders and without principles, and with little commitment either to the country where he was born or to the country where he lives.
	Mr. Mittal is a lobbyist for tariffs, and a lobbyist against the British in Bucharest. He is an Indian in Algeria, where he bought the state-owned steel complex with diplomatic support from New Delhi, two weeks after the Sidex signing in London. He is a Republican donor in Washington, and a socialist firebrand in Hampstead, or so we are led to believe. Throughout all this, he is a man who knows the value of money.
	As the London correspondent of The Times of India has said of Mr. Mittal's donation:
	He gave it to get exactly what he wanted, and they
	the Labour Party
	took it for the same reason.
	It is clear from the way Mr. Mittal operates on a global scale that his donation was clearly designed to win favour with the UK Government at a critical time during the Sidex negotiations. The evidence for that may be circumstantial, but it is powerfully persuasive.
	Mr. Mittal got what he wanted. I am prepared to accept that there may be an entirely innocent explanation for the Government's acquiescence in his demands. The problem is that we have yet to hear a convincing explanation. If a Minister backs a firm for a string of reasons and it happens to be a Labour donor, who can ever prove what was uppermost in the Minister's mind? The problem with this case is that the string of reasons has evaporated into thin air. We cannot know for certain whether anyone in this affair has committed a conscious act of corruption as a direct result of improper influence. This probably did notprobably did notinvolve anything so overt as a crude pay-off, but something much more insidious: a culture in which business supporters of a projectto use new Labour phraseologyare not subject to the basic checks that would otherwise set the alarm bells ringing.
	We can be certain of one thingthis affair will continue to poison the Government's relations with the steel industry, will corrode public confidence in the political process and will undermine the Government's standing and the Prime Minister's personal integrity at home and abroad as long as the questions go unanswered.
	The British people, not least the redundant steel workers from the Secretary of State's constituency, are owed an explanation and an apology from their Government. In refusing to answer questions, in refusing an inquiry, in making a series of false and inaccurate statements, in putting up a Minister today who has no responsibility for what was done nor for what can be done, the Government have shown their contempt for democracy, for the steel industry and for the people of the UK.
	The Government are running out of time and excuses. [Interruption.] With all due respect, the 3,000 redundant steel workers are not laughing tonight. Unless the Government answer the charges against them and the steel industry's calls for support, they will be held in contempt by the British peoplein this case, a contempt, I regret to say, that will be richly deserved.

Paul Murphy: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	recognises the fundamental strengths of the British steel industry, which is amongst the most efficient in the world; believes that, despite the regrettable decision of Corus to cut UK steel capacity, the industry has a long term future in Britain, as recently demonstrated by the decision of Corus to invest in the Port Talbot works; further recognises that the success of economic restructuring in Central and Eastern Europe, together with the enlargement of the European Union, is essential for the future of the British steel industry and other British manufacturing as it will extend markets and reduce hidden subsidies; congratulates the European Bank for Reconstruction and Development for its work on restructuring the Romanian and other Eastern European companies, including through supporting the successful sale of the SIDEX steel corporation; and further welcomes measures put in place by the Government and the National Assembly for Wales to train and retrain former steel workers and regenerate communities affected by Corus job losses..
	Plaid Cymru[Interruption.] It is good to see right hon. and hon. Members on the Opposition Benches for a debate on Welsh matters; I wish we could see them a little more often. Plaid Cymru has the chance once a year to bring a Ministerme, or anyone else; all Ministers represent the Governmentto the Dispatch Box to answer for Government policy, especially as it applies to Wales. Plaid Cymru wants to separate Wales from the rest of the United Kingdom, so presumably its interest lies in how these matters affect Wales.

Elfyn Llwyd: Not Romania.

Paul Murphy: We will come to that in a minute. The hon. Gentleman should not be so flippant, because the essence of this debate is Romania.

David Cameron: Will the right hon. Gentleman give way?

Paul Murphy: I shall give way in a few moments.
	We could be debating the health service, days after the opening of the first new hospital in Cardiff in three decades. We could be debating education and how we can build on our record exam results. [Interruption.] That does not prevent the hon. Member for Ribble Valley (Mr. Evans) from talking about health or education matters in Welsh questions. We could be debating pensioner povertya real and genuine problem in Walesand how we can build on the success of the minimum income guarantee. We could even be debating transport and how we can speed the recovery of our railways in Wales from the disastrous privatisation forced on them by the Tories. But we are debating none of those matters today. Instead, whether the Opposition like it or not, we are debating the Romanian steel industry and its impact in terms of the development of Europe.
	Plaid Cymru often claimsindeed, it has done so for many yearsthat it is a truly internationalist party. It says that it wants to see Wales in Europe and that Britainit has discovered Britain in the last couple of weekshas nothing to do with that scenario. It wants to create what is termed a Europe of the regions, stretching from the Urals in the east to County Cork in the west. Now we know the truth: its internationalism stops at the River Wye. It wants the economies of eastern Europe to remain stuck in the Soviet era, rather than having a reasonable chance of competing, like other European countries.

David Cameron: How does the Secretary of State define Mr. Mittal's steel company? Is it a British company, a British-based company, a company with British connections or none of the above?

Hon. Members: Phone a friend.

Paul Murphy: I think I understand what phone a friend means. I will come to the thrust of my argument in a moment, but first I shall touch on what the hon. Gentleman says. Of course the company has a British base, a headquarters in London and employs people in Britain. The Prime Minister wrote to the Romanian Prime Minister some days before the signing ceremonybut after a decision on the Sidex plant had been taken. If the Romanian economy prospers, develops and becomes part of an enlarged EuropeI will come to the European loan in a momentcompanies in Great Britain and Wales will benefit.

Andrew MacKay: I have the highest regard for the Secretary of State, so I am sorry that he is the fall-guy who has to open the debate; there are others who should be at the Dispatch Box instead.
	It is widely believed outside the House and on the Opposition Benches that the Prime Minister intervened only because of Mr. Mittal's very large donation to the Labour party. To prove me wrong, would the Secretary of State be good enough to consult the fat red file in front of him and tell us which, and how many, other companies with small interests in our countrylike Mittal'sthe Prime Minister has made representations about to the leaders of other countries?

Paul Murphy: I completely reject the accusation that the letter had anything whatever to do with a donation to the Labour party. The Prime Minister has made it absolutely clear from this Dispatch Box[Interruption.] He said what he said because it is true that the donation was in no way linked to the letter to Romanian Prime Minister. I shall come to what the letter was about in a moment, but I should point out that it dealt with nothing other than the absolute need to ensure that Romania becomes part of a new and energetic Europe.

Michael Fallon: Is the Secretary of State seriously suggesting that neither the Prime Minister nor any Government Department was aware that Mr. Mittal was a donor to the Labour party?

Paul Murphy: I am certainly telling the House that the donation had absolutely nothing to do with the letter. [Hon. Members: Ah!] Of course I am saying that.

Diane Abbott: It is with some trepidation that I intervene in what is essentially a Welsh debate. I have listened with great care to my right hon. Friend's remarks. The whole House will agree that it is in the long-term interests of the rest of Europe that the Romanian economy and steel industry be restructured, but in the short term Mr. Mittal's interests clearly run contrary to those of the British steel industry. It remains a conundrum to many people inside and outside the House that the Prime Minister should sign that letter, as in the short term he has signed up to interests contrary to those of the British steel industry.

Paul Murphy: I shall come to that point in a moment, but first I propose to address the relationship between the British steel industryparticularly in Walesthe letter and the development of the Romanian economy. That is why I am here. I am here at the Dispatch Box, not because I am a fall-guy, but because I am interestedas I am sure are all those who represent Welsh constituenciesin the development of the Welsh economy, including the Welsh steel industry. There are not many Opposition Members who represent as many steelworkers as I do. I represent a steel constituency and I know about the position of the steel industry.

Several hon. Members: rose

Paul Murphy: I wish to continue the thrust of my argument, which I have only just started.

Andrew MacKay: In the heat of the debate, the Secretary of State inadvertently failed to answer my principal question, but I am sure he will wish to do so before he moves on. How many other small companies has the Prime Minister made representations about to other heads of state, and who are they?

Paul Murphy: I cannot tell the right hon. Gentleman about correspondence between Prime Ministers, which is governed by international convention and commercial confidentiality. When his Government were in power, they did exactly the same for company after company. There was a time, when I was a younger man, when I could not go into a high street and buy produce that did not come from a firm that gave money to the Conservative party. However, I am also sure that both Labour and Conservative Governments helped those companies, to the benefit of the British economy.

Jackie Lawrence: I am amused by some elements of the exchange that has just taken place. Will my right hon. Friend remind the House which Government introduced legislation to bring transparency to donations to political parties? What was the attitude of the party that has chosen the subject of this debate, and how did it vote on the issue? If the official Opposition are so concerned about the issue, why did they not do something about it during the 18 years they were in government?

Paul Murphy: The irony is that the debate would not be taking place if it had not been for legislation introduced by this Labour Government. That is the reality.

Several hon. Members: rose

Paul Murphy: I must move on; otherwise, other hon. Members will not have an opportunity to make their contributions.
	During last week's Welsh affairs debate, the hon. Member for East Carmarthen and Dinefwr (Adam Price) said that
	many things are happening in the world that will be detrimental to the prospects for Welsh companies in a range of sectors. However, should our Government actively support such developments?
	Predictably, he answered his own question, in the negative, and said that we should never have supported Mr. Mittal's acquisition of Sidex because a successful Romanian steel industry would mean that
	jobs in the Welsh steel industry will be endangered.[Official Report, 28 February 2002; Vol. 380, c. 917.]
	That, in a nutshell, is the Plaid Cymru approach to east European industrial reconstruction: there should not be any if it supposedly threatens any Welsh jobs.
	In a written answer recently, the Prime Minister said:
	Privatisation of its steel industry through the sale of Sidex is an important element in its economic reform which will help to establish a level playing field between EU and Romanian steel producers and should lead to a reduction in levels of state subsidies which disadvantage UK steel producers. The privatisation did not threaten British jobs.[Official Report, 14 February 2002; Vol. 380, c. 612W.]
	Corus has also said that Mittal is not one of its major competitors.

Simon Thomas: The Secretary of State's central point is that the privatisation of the Romanian steel industry was of benefit to a British company. The letter written by the Prime Minister to the Romanian Prime Minister clearly stated:
	I am particularly pleased that it is a British company which is your partner.
	He means that Mittal's company is a British company. The letter continues:
	This should send a very positive signal to investors and businessmen
	I do not know what happens to business women
	in Britain and more widely. Together with the other measures you are taking, I hope it will stimulate renewed interest by British business in Romania.
	The letter specifically says that a British company will be Romania's partner. As it has now been comprehensively proved that it is not a British company, does not the Secretary of State's argument fall to pieces?

Paul Murphy: Of course it does not. The hon. Gentleman omitted to quote from the beginning of the letter, which said:
	I am delighted by the news that you are to sign the contract for the privatization of your biggest steel plant SIDEX, with the LNM Group. This represents an important step forward in the efforts you and your government are making to restructure and modernise your country's economy.
	The rest of the letter came from that, not from the sentence to which he referred.

Several hon. Members: rose

Paul Murphy: No, I shall not give way.

Simon Thomas: On a point of order, Mr. Speaker. My copy of the letter that I prayed in aid and which the Secretary of State relied on comes from www.guv.ro, which is the Romanian website, as the Government refused to give it in answer to a parliamentary question from my hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price). Hon. Members may not have a copy of the letter. Will you ensure, Mr. Speaker, that a copy is placed in the Library?

Mr. Speaker: That is not a point of order.

Paul Murphy: The whole letter is printed in the booklet The privatisation of Sidex SA Galati, so it is there for all to see. The hon. Gentleman still misses the main point. It is all very well questioning the newly discovered Britishness of companies, but it is much more important to concentrate on Romania and eastern Europe. If eastern Europe does not come up to the level of other countries of the European Union, how on earth can we expect enlargement to work? How on earth do we expect companies from Wales and the United Kingdom to invest in Romania, which has a population of 25 million? If right hon. or hon. Gentlemen had a factory in their constituency that traded with Romania, they would welcome this news, not disparage it.

Elfyn Llwyd: No doubt it is laudable to assist Romania to modernise and to join the European Union. We are in favour of the EU, but I doubt that it is sensible or right for the Government to bat for Romania against Welsh and British jobs, and to use British taxpayers' money to bring the Romanians over to sign the deal.

Paul Murphy: In no way is it a question of using the full power of the state or British taxpayers' money. I shall come to the issue of the British taxpayers' money, because that relates to the European loan. I doubt the points that the hon. Gentleman and his party have made about the euro, because I saw in Wales on Sunday last Sunday the headline Garbagegate MP Sparks Euro Storm. Presumably that refers to the hon. Member for East Carmarthen and Dinefwr, whose views on Europe may differ from those of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). They are entitled to disagree, but if the hon. Member for East Carmarthen and Dinefwr opposes Europe, I can understand what this argument is about.

Several hon. Members: rose

Paul Murphy: I shall finish my point.
	I know that the hon. Member for Meirionnydd Nant Conwy is very much in favour of the European project. Romania is a small countryof all parties, surely the Welsh nationalist party should support small countriesthat is trying to develop and, as a struggling democracy, to get out of the grip of communism that held it down for years. That is what the letter and the debate is about. It is not about a nonsensical claim that the redundancies at Corus were made as a result of the letter that Mittal had. It is nonsense to suggest that, and I shall explain why.

Boris Johnson: I am still perplexed about why the Prime Minister saw fit to call this company British when it patently is not. Will the Secretary of State enlighten the House as to whether he thinks LNM is any more British than Usinor, the defeated French company that also has offices in this country? If LNM is more British, will he explain why? Is there any reason other than that Mr. Mittal gave 125,000 to the Labour party?

Paul Murphy: I doubt whether there are many steelworks in the hon. Gentleman's constituency. Those of us who represent industrial areas know that in a global economy a company's headquarters may be anywhere in the world, and its factories and other parts of the company may be somewhere else. Even Corus, which has said nothing about the tariffs, has an American subsidiary. In this era of global capitalism, we know full well that virtually every company is from a different countrythat is certainly the case in my constituency. It happens all the time.
	Let us return to the central point. It is nonsense to suggest that the Welsh steel industry somehow suffered as a result of the letter. Let me first touch on the question of British taxpayers paying towards Mr. Mittal's company

Crispin Blunt: Will the Secretary of State give way?

Paul Murphy: Yes, for the last time.

Crispin Blunt: Can the Secretary of State explain why Jonathan Powellor the Prime Minister, or someone else in his private officesaw fit to remove the word friend from the Foreign Office draft of the letter?

Paul Murphy: First, Jonathan Powell did not do that. Secondly, as the hon. Gentleman knows and as any Conservative Member who has been a Minister will know, letters are routinely drafted and redrafted before reaching the Minister who signs them.
	Let me now deal with the question of the loan, which is central to the argument advanced by the hon. Member for East Carmarthen and Dinefwr. I assume that he was referring to the European Bank of Reconstruction and Development, as there was no other financial involvement. According to the bank, its mission is
	financing the economic transition in central and eastern Europe and the CIS.
	Its aim is simple and straightforward: to help those countries, just as it helps developing countries in Asia, Africa and elsewhere.

Adam Price: rose

Paul Murphy: I have only just finished quoting the EBRD. I will give way to the hon. Gentleman in a second.
	The bank has helped similar projects throughout eastern Europe. There has been a 14 million euro investment in refrigerator makers in Russia, as well as a 36 million euro loan to the Croatian tourist industry, a 21 million euro loan to boost the export hopes of Bulgaria's leading pharmaceutical company, and a 21 million euro investment in the railways of Bosnia-Herzegovina to improve the transport of industrial goods. There are many other examples. Just about every project that the bank supports couldif the facts were stretched beyond the realms of possibilitybe said to have some effect on Welsh industries.
	Let us now examine the issue of United Kingdom funding of the bank. We have subscribed 1.7 billion euro to its capital. Along with many other countries, we guarantee its loans. That allows it to borrow at preferential rates on the world's markets. But there is no question of any direct financial aid from Britain to make the purchase of Sidex possible: that is a myth.
	The reason for our actions is obvious, but those who tabled the motion still do not understand the purpose of all the help for Romania and other eastern European countries.

Adam Price: That is ridiculous.

Paul Murphy: Of course it is not ridiculous. Let me give an example. My hon. Friend the Member for Islwyn (Mr. Touhig), the Under-Secretary of State for Wales, is going to Prague next week. He will take with him Welsh business people, who will try to secure as much businessand, therefore, trade and jobsfor Wales as possible. That would not happen if the Czech Republic had not been helped. If such countries are not helped to attain a certain standard by the European Union, and by developed countries throughout the world, how on earth can we be expected to trade with them?
	A classic example was the privatisation of Sidex. Without it, the chances of an improvement in the Romanian economy and of Romania becoming part of an enlarged European Union would have been very slim.

Adam Price: Will the Secretary of State tell me why no assessment was made of Mr. Mittal's record as an employer in Ireland, where there was the same binding five-year agreement regarding employment as exists in Romania? Mr. Mittal ripped up the agreement two weeks after it was terminated, throwing 600 people out of work. If that is repeated in Romania, how will the Government and the country look to the Romanian people?

Paul Murphy: It has not been repeated. Besides, although the hon. Gentleman and others seem to think that all this business happened yesterday, it happened nine months ago.
	Ensuring that we help Romania, which was the purpose of the letter, depends on the success of the steel plant, Sidex. It was holding up the Romanian economy, because it was in the grip of old-fashioned, Soviet-style, communist economics. It had to change, and this was an ideal opportunity.

Nigel Evans: The Secretary of State has just informed the House that the Under-Secretary of State for Wales will be going to the Czech Republic with representatives of Welsh companies to promote Welsh business. Will the right hon. Gentleman say what constitutes a Welsh business? How many people does a company have to employ in Wales for it to be considered a Welsh business?

Paul Murphy: The hon. Gentleman is better than that question implies. Would he suggest, for example, that some of the American companies that between them employ 3,000 people in my constituency are Welsh? They are American, not Welsh. This nonsense about semantics is rubbish, as the hon. Gentleman, and everyone else, knows.
	I turn now to the question of how this country has helped the Romanian economy. Last year, UK exports to Romania amounted to 340 million. Do Opposition Members consider that to be worthless or meaningless? Should the companies in this country that produced that 340 million of exports to Romania be discarded? The increase is substantive, compared to just a few years ago. Companies such as Unilever, Glaxo and Shell have operations in Romania, and that is a pointer to the future.
	We have not yet touched on the question of what the National Assembly thinks should be done with regard to eastern Europe. A recent report to the Assembly from the Wales European Centre stated:
	There is evidence of increasing interest in securing trading links by individual Welsh companies in the central European countries . . . enlargement of the EU will vastly increase the opportunities for Welsh business.
	That is what it is all about.

Alex Salmond: The Secretary of State was not consulted about the matter under discussion, but he has looked into the mind of the Prime Minister and declared him to be innocent of any undue influence. Will the right hon. Gentleman look into the mind of Mr. Mittal for a few seconds? Given what we know about Mr. Mittal's global interest, why did he give 125,000 to the Labour party? Does the right hon. Gentleman think that that was a matter of principle?

Paul Murphy: I am not in the business of looking into people's minds. All I know is that the acquisition of Sidex had to be applauded by our Government and by other Governments in Europe. That is why the European loan was made. The EBRD press release about the acquisition of Sidex makes it clear that the European Union, the World Bank and the EBRD all agree the acquisition did the development of the Romanian economy nothing but good.
	Of course, the principle that strong economies and trade are good for all of us is exactly why the European Union has an objective 1 programme. In my view, it is good that there are no nationalists in government in France or Germany: if there were, the chances of money coming to Wales would be zilch.

Pete Wishart: The question has been asked already, but did the Prime Minister know about the donation by Mr. Mittal of 125,000 to the Labour party? Did any Secretary of State, special adviser or civil servant know about it?

Paul Murphy: My right hon. Friend the Prime Minister has said already that he did not know. All those matters are on the record.
	I wish to return to the question of whether the factors to which I have referred in some way affected the Welsh steel industry. About 18 months ago, we heard that there were to be dramatic changes to the Welshand Britishsteel industry, and to Corus. It fell to me, as Secretary of State for Wales, to have meeting after meeting with senior officials from Corus, including with its chairman and chief executive, Sir Brian Moffat. The meetings were held in my office, and were attended by other Ministers and people from the National Assembly.
	Time after time, my right hon. Friend the Prime Minister asked Corus what the Government could do to help the company out of its troubles. Time after time, the answer was, Nothing. Absolutely nothing.

Crispin Blunt: On a point of order, Madam Deputy Speaker. I am sorry to interrupt the Secretary of State, but I fear that, just now, he may inadvertently have misled the House. He said from the Dispatch Box that the Prime Minister has said, in terms, that he did not know that Mr. Mittal was a donor to the Labour party. I am not sure that the Prime Minister has said that. If the Prime Minister has not said, in terms, that he did not know about the donation, will you confirm that the Secretary of State will return to the House as soon as possible to put the record straight?

Madam Deputy Speaker: That is not a point of order; it is a point of debate.

Paul Murphy: The Conservatives are more interested in that than they are in the Welsh steel industry. As I have said, time after time, we had meetings with Corus, and, time after time, it said that the Government could not help. The hon. Member for East Carmarthen and Dinefwr talked about compulsory purchaseI assume that he means nationalisationbut it did not want that, and neither did we. All the time, we asked whether there was anything that we could do. Corus has denied that the Mittal situation had any effect. None of it had the slightest effect on Corus's decision to cut 3,000 jobs in Wales and 6,000 jobs in the United Kingdom as a whole.
	There was nothing that the European Union could do because of strict regulations on state aid, all of which were examined. There is no question of Corus's decision being affected by anything other than the fact that it wanted to do what it eventually didshed those jobs. It blamed certain things such as the euro, and hon. Members might get involved in that argument. It also blamed over-capacity but, whatever the reasons, it did not blame Mittal.

Nigel Evans: It is important to clarify this point because I do not believe that the Prime Minister has ever denied that he knew that the 125,000 donation had been made. Has the Prime Minister ever stated that he did not know that that donation had been made before he signed the letter?

Paul Murphy: I have already answered that, and I shall not go over it again now.
	Some of my hon. Friends have referred to the Iron and Steel Trades Confederationsome Conservative Members referred to it disparagingly. However, it is the biggest steel trade union. Its general secretary stated:
	As the union involved in trying to save UK steelworkers jobs and preserve this strategically important UK industry, the ISTC can state unequivocally that we received the full support of the Prime Minister and the Welsh First Minister.
	Indeed, he went on to dismiss the allegation that a donation to the Labour party was linked to the Corus closures, and stated:
	I explained this to Adam Price, Plaid Cymru MP for Carmarthen East and Dinefwr following his decision to raise this matter . . . and he apologised. I am dumbfounded that he continues to make this spurious connection.

Lembit �pik: I listened with interest to what the Secretary of State said about our international responsibilities. Knowing about eastern Europe, on account of my roots, I have a lot of sympathy with his remarks. On the core subject of the debate, if it can be shown that the political parties who are attacking the Government have represented in a political context individuals or groups who have given money to those parties, does he feel that to some extent that undermines the credibility of the points made?

Paul Murphy: Of course. We might all be tempted to go down that line. The events of a previous Parliament make the subject of today's debate pale into insignificance. However, the jobs to which I referred are significant.
	The Government remain implacably opposed to tariffs. The Prime Minister has made his views clear in a letter to and a conversation with President Bush. Of course, we understand that the US steel industry needs restructuring, but we believe that tariffs are against the interests of the European Union and Europe.
	I represent a valleys constituency and, as has been mentioned, a steel seat. There are still steel jobs in my constituency, although, of course, many of them have been lost in the past few months. I did not read about the problems of the steel industry in a newspaper or see them on television. I have lived in steel communities in the Gwent valleys all my life. Last week, I visited Ebbw Valea great steel townwhere I worked for 17 years. The town has taken a real knock thanks to the closure of the steelworks, not because of Mittal but because of Corus's decision. However, the people have not given up. They are not quitters, and, as my hon. Friend the Member for Blaenau Gwent (Llew Smith)who was here this afternoonwill agree, there is as much dynamism and entrepreneurial spirit in Ebbw Vale as there is in many towns in England and Wales.
	What the people of Ebbw Vale want from Government are not handouts or even expressions of sympathy, but the solid support needed to help them pick themselves up and get moving again. The Government and the Assembly are providing just that. We have a 32 million recovery package to assist the Gwent communities hit by the Corus decisions, and we are putting money into new training and retraining packages, with 1 million going into the Wales union learning fund.
	In Ebbw Vale, the Assembly is putting in the money needed to reopen passenger train services and to establish the Ebbw Vale learning campus and create a centre of excellence. We are also providing assistance for the other communities that have been hit. For example, 4 million is going to the community in Bryngwyn.
	Today, Plaid Cymru Members have ignored all that. They have not said a word about the regeneration of our steel communities. They are not interested in hearing good news stories about Wales. They ask for more money from a state to which they do not want to belong in the first place. By their friends, of course, we shall know them. The hon. Member for East Carmarthen and Dinefwr was cheered by the Conservatives, and I wonder what people in his constituency will say about that. The two parties are united by many things, not least of which is their deep frustration at the successeseconomic, social and electoralof the Labour Government and those parties' opportunistic willingness to exploit the suffering of our communities under stress just for the sake of political points scoring.
	That will not wash, and it did not wash in Ogmore. Nobody is fooled. When all the dust has settled on this farrago of nonsense, one thing will be remembered: Plaid Cymru's rhetoric about internationalism has no weight, no sincerity and no credibility.

John Whittingdale: I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on choosing this subject for the debate. There is no doubt that it is a matter of great importance not just to the steelworkers in Wales, but to steelworkers across the country and to everyone who cares about the probity and integrity of government.
	The motion tabled by Plaid Cymru encapsulates the concerns of Conservative Members too, and I shall invite my colleagues to support it in the Lobbies. It is noticeable that the motion does not refer to Wales or to the Welsh industry. It refers to the problems afflicting the whole steel industry in the United Kingdom. It is therefore extraordinary that the Government have chosen not to put up a Minister to reply to the debate from the Department that is responsible for that industry. Nothing could more clearly demonstrate the fact that the Government have something to hide than the failure of a Minister from the Department of Trade and Industry to come to the Dispatch Box today.

Frank Roy: On the point about the United Kingdom steel industry, will the hon. Gentleman tell the House what he did when the Conservative party was in power for 18 years? Year after year in that period, the Conservative party made steelworkers redundant, including 10,000 in my constituency.

John Whittingdale: One of our achievements was to help to make the British steel industry one of the most efficient and competitive in Europe. It most certainly was not that when the Conservative Government came to office.

Mark Tami: Does the hon. Gentleman recall that, in 1980 in Alyn and Deeside, Shotton steelworks lost 15,000 jobs in a single day? If that is the achievement of the Conservative party, it is a very sad one.

John Whittingdale: This is not an exercise in delving back into history, but that was part of the process that made British Steel the most efficient company in Europe. The more that the hon. Gentleman and other Labour Members attempt to distract from the main issues that the debate is about, the more the people listening out there will be convinced that the Government are desperate to avoid having to answer the real questions that have been put to them.
	This is not the first occasion on which Ministers from the Department of Trade and Industry have refused to come to the Dispatch Box or that the Government have attempted to duck the issue. When the issue was first aired in the Chamber at DTI questions last month, the hon. Member for Welwyn Hatfield (Miss Johnson) was deputed to answer on behalf of the Government. I have great respect for the hon. Lady, but she is an Under- Secretary of State whose responsibilities in the DTI have nothing to do with the steel industry. Yet those who are responsiblethe Secretary of State and the Minister for Industry and Energywere content to sit on the Bench next to her and watch her while she squirmed.
	Last week, in the St. David's day debate, my hon. Friend the Member for Ribble Valley (Mr. Evans) again set out the questions that steelworkers in Wales and across the country want answered. Yet in his response, the Minister did not mention the issue even once. It is clear that the Government will do anything to avoid having to answer questions on this matter. The Secretary of State's speech so far has done nothing to counter that impression.

Paul Murphy: The hon. Gentleman is aware, I am sure, that this debate is sponsored by Plaid Cymru. It happens only once a year, for half a day, and it is conventional for Wales Office Ministers to reply to it. More significantly, does the hon. Gentleman accept that when we talk about the Welsh steel industry, the fact that his party does not have one single Member of Parliament representing a Welsh constituency puts his credibility at risk?

John Whittingdale: As I have pointed out, the motion on the Order Paper does not refer to the Welsh steel industry but to the United Kingdom steel industry. In his speech, the right hon. Gentleman appeared to suggest that the minority parties could bring any Minister to the Dispatch Box to answer their debate. That is clearly not the case. This debate should be answered by a DTI Minister, and it is plain that DTI Ministers are not willing to do so. Indeed, the only party that appears willing to come to the Government's aid in this debate so far is the Liberal Democrat party.

Elfyn Llwyd: It strikes me as arrogant of the Government to suggest that the Secretary of State for Wales should reply to the debate even before they saw the motion. The right hon. Gentleman said to me last week that he thought that he would be replying even before seeing the motion, and the motion does not mention Wales.

John Whittingdale: The hon. Gentleman is entirely right. If the minority parties were able to bring any Minister they wanted to answer their debate, it would not be the Secretary of State who has been put up today, but the Secretary of State for Trade and Industry.

Lembit �pik: I understand the hon. Gentleman's criticisms of the Liberal Democrats. If I may clarify matters, I made my earlier contribution because I do not like hypocrisy in the Chamber. I hope and expect that the hon. Gentleman will make no criticisms of other parties if his own is not capable of achieving high standards. What bothers me most in this debate is the effort made to besmirch political parties, when the truth is that politics as a whole is involved. No public interest is served by such efforts.

John Whittingdale: If the hon. Gentleman really were so concerned about hypocrisy, he would be a little more critical of the Government than he appears to be.
	I want to talk about the UK steel industry, which is the issue before us. The UK steel industry, as I said earlier, is one of the most productive in the world, employing 50,000 people. However, the industry is suffering from declining output and competitiveness, with thousands of redundancies having been declared in the past 18 months alone. In part, the industry is suffering from the same problems as the rest of manufacturingthe weakness of the euro, cheap imports and the cumulative impact of the extra tax and regulation that have been introduced by the Government, not least the climate change levy.
	In addition, the industry is having to operate in a global market that is suffering from severe overcapacity. In a written answer to me yesterday, the Secretary of State for Trade and Industry said that there is no precise estimate of global overcapacity, but that estimates ranged from less than 80 million tonnes a year to more than 200 million tonnes a year. The United Kingdom Steel Association uses the latter figure, while some estimates are higher still.
	Through the Organisation for Economic Co-operation and Development, Governments are negotiating to reduce the surplus inefficient capacity in steel with more than 100 million tonnes identified for closure within the next four years. It was in recognition of that need that the last Conservative Government pressed the European Commission not to allow the aid to be given to Irish Steel which was going to be given to pave the way for a takeover by Mr. Mittal's Ispat company. As a former DTI Minister said:
	Irish Steel, in a subsidised way, was just edging out British Steel products and that led directly to the loss of British jobs.
	He made it clear that that was the view not only of British Steel but of the trade unions and indeed of Labour Members who were lobbying the Department to stop the takeover from going ahead.
	What has changed since then? It is certainly not the problem of overcapacity, whichif anythingis worse. This time, why did the Government, instead of trying to encourage the reduction of global capacity, work against that by backing Mr. Mittal's proposed takeover of the Romanian steelworks?
	First, we were told that such support was no different from that given by the Government to any other British company trying to win a contract abroadexcept that LNM is hardly British. It is a curious definition of British that allows a company whose headquarters are not in London, as the Secretary of State for Wales suggested, but in a Caribbean tax haven, and which employs fewer than 0.1 per cent. of its work force in this country to qualify for support to promote its interests not only from the Government but from the Prime Minister in a personal capacity.
	We were then told that the letter was merely one of congratulation after the deal had been signed, yet a spokesman for the Romanian Government has since said that it played a decisive part in winning the contract. Then we were told by the Minister for Europe, that it was a battle with the French. He said:
	It's better for a company with British staff, and British connections . . . to get a contract ahead of a French company.
	However, while Mr. Mittal's LNM company has been in the UK only since 1995 and employs 91 people in this country, Usinor, the French company, has had a British arm since 1923 and has more than 250 people on its payroll. The European Bank for Reconstruction and Development said:
	The French company fell out months earlier. That was widely known.
	We were then told that the letter had been drafted by the British ambassador to Romania, that the Prime Minister had barely glanced at it before signing it and that he would have had no idea that the beneficiary had given any money to his party. Yet we now know that the original draft referred to Mr. Mittal as a friend of the Prime Minister and that that reference was removed by Jonathan Powell, the Prime Minister's chief of staff. I was interested to hear the Secretary of State say that that was not the case although the World at One programme had clearly identified Mr. Powell as responsible.
	The Prime Minister then said that he certainly had not known that Mr. Mittal was a Labour donor, nor that he had any connection with the LNM company, despite the fact that the reason why the company is called LNM is that those letters stand for Lakshmi N. Mittalsomething that must have been in the briefing note supplied to the Prime Minister when he signed the letter. We also know that not long before signing the letter the Prime Minister attended a party for major contributors to the Labour party, at which Mr. Mittal was present.
	The suggestion that Mr. Mittal's company was British or that the Government's support for it was part of a battle to win some lucrative contract in the teeth of French competition does not bear scrutiny. In fact, the position is even worse than that, for we now know not only that the connection between Mr. Mittal's company and this country is tenuous at best but that LNM has been actively working against our national interest.
	Irish Steel, now named Irish Ispat, went into liquidation last year, owing money to hundreds of businesses in this country. Many of them are small firms such as Mawdlseys in Gloucestershire, which is owed 260,000 for work done with no indication that it will ever be paid. Even the Government are owed money in unpaid VAT, yet the Prime Minister was happy to write to the Romanian Prime Minister recommending Mr. Mittal's firm.

Chris Bryant: If all that the hon. Gentleman says is true, why did the Conservative party refuse to stop receiving money from foreign organisations and businesses until forced to do so by the law?

John Whittingdale: As I pointed out, the last Conservative Government intervened to try to prevent Mr. Mittal's company from taking over an overseas business. We were standing up for British steel and British jobs, rather than supporting a company which plainly is not British and which is threatening British steel and British jobs.

Julian Lewis: I apologise to my hon. Friend and to the Secretary of State for not having been present for the earlier part of the debate, but I was present for the debate on Welsh affairs on Thursday. The line that the Secretary of State took then was that the Government had acted out of the goodness of their heart to help build up Romania and deprived areas of eastern Europe. However, the line that the Prime Minister has consistently taken is that they were acting to help British industry and back a British company. Can my hon. Friend tell me which line the Secretary of State has been taking today?

John Whittingdale: Part of the problem is that the Government's defence of their actions has changed every five minutes. We have been given a dozen reasons why the Prime Minister chose to intervene, and each one that is probed is shown to be incredible and untrue. That is why nobody believes the Government's explanations any more.
	I return to the threat to the UK steel industry.

Paul Murphy: The hon. Gentleman has not yet touchedhe may do so later in his speechon the significance of the enlargement of Europe, and Romania being part of that. Does he agree, first, that the enlargement of Europe, which includes Romania, is a good thing for British industry, and Welsh industry, for that matter, and secondly, that a privatised Sidex is much better for competition than a communist-controlled state industry, heavily subsidised, which does not produce a level playing field for our own steel industry?

John Whittingdale: I am utterly delighted to welcome the Secretary of State to the ranks of those who support privatisation. That is a fairly new theme for the Labour party.
	I support enlargement of the European Union. I support Romania coming into the EU. I want to help the Romanian economy. However, I do not want to do so at the expense of British steel, British industry and British jobs. That is what is at stake.

Paul Murphy: Will the hon. Gentleman give way?

John Whittingdale: A last time.

Paul Murphy: This question is crucial to the debate. Every time the European Bank for Reconstruction and Development gives a loan to a country such as Romania or Bulgaria, of course there will be a risk of competition. That is inevitable, but the consequence is that the trade which this country will have with the burgeoning economies of those countries will mean more jobs, more work and better conditions. Does the hon. Gentleman agree?

John Whittingdale: Once again, the explanation is changing by the minute. First, we were told that the Romanian steel works would have been acquired by the French, had the Prime Minister not intervened in support of a supposedly British company. There was no question of the steel works not having a purchaser if the company had not gone ahead. The point at issue, which the right hon. Gentleman should know, as he represents a large number of people involved in the steel industry, is that the biggest threat to the steel industry is overcapacity. That is why Governments across the globe are working to try to reduce overcapacity. The right hon. Gentleman's Government have maintained overcapacity, which must be damaging to the long-term interests of British steel and British jobs.
	There is a greater threat to the steel industry, and it is much more immediate: the potential prospect of import controls imposed by the US Government. Perhaps the most extraordinary revelation of all in this saga is that fact that Mr. Mittal, we discover, is actively campaigning in America for the imposition of tariffs on steel imports from the UK.
	At Department of Trade and Industry questions last month, the Under-Secretary of State for Trade and Industry, the hon. Member for Welwyn Hatfield (Miss Johnson), replied to me that
	the industry faces concerted unilateral US action on steel imports that would create fresh barriers to transatlantic trade and fresh distortions in the global steel industry. That is the real issue facing the UK steel industry.[Official Report, 14 February 2002; Vol. 380, c. 302.]
	She was entirely right. The threat of US import tariffs is the greatest threat facing the steel industry. It will directly place at risk 400,000 tonnes of UK steel exports, and it will indirectly risk adding to the steel surplus elsewhere, further depressing prices and threatening jobs. We are told that an announcement on the matter is expected tomorrow.
	The Secretary of State said that the United Kingdom will support retaliatory action against the United States if import controls are imposed, and the Prime Minister raised the issue with President Bush, yet once again no Minister from the Department of Trade and Industry is willing to come to the Dispatch Box to speak about this immediate and extremely serious threat to the UK steel industry, despite it clearly being one of the main topics for debate today. Ministers are embarrassed that one of the prime lobbyists for US import controls is none other than Mr. Mittal. Ispat Inland, Mr. Mittal's American steel company, gave more than 400,000 to the lobbying organisation that is pressing the US Government to impose import tariffs; yet the Prime Minister was happy to write to the Romanian Prime Minister recommending Mr. Mittal's firm.
	Why did the DTI not advise Downing street that preserving global steel-making capacity was the last thing that the UK steel industry needed? Why did it not tell No. 10 of the hundreds of British small firms that were still owed money as a result of Mr. Mittal's Irish takeover? Why did it not warn the Prime Minister that his friend was actively campaigning in the US against UK interests? It did not because, as we are now told, it was not even consulted before the letter was signed. It is the maxim of Sherlock Holmes that once we have eliminated the impossible, whatever remains, however improbable, must be the truth. The one explanation left for the Prime Minister's intervention in support of Mr. Mittal's bid is that it was a payback for the support that he had given to the Labour party.
	I am not necessarily suggesting the Prime Minister wrote because Mr. Mittal rang him up to call in a favour. However, we know from Sir Richard Packer, a former permanent secretary, the extent to which the culture of cronyism permeates the Government's activities. In a masterly understatement, Sir Richard said that it was grossly disproportionate for the Prime Minister to write to his Romanian equivalent supporting Mittal's bid for Romanian assets. His explanation is that Downing street must have contacted the British ambassador in Romania to inform him that Mittal was known cordially to the Prime Minister. The ambassador would have realised that, in Sir Richard's words, examining closely Mittal's precise entitlement to help from Her Majesty's Government would be only too likely to result in the Foreign Office being told that he was proving unhelpful. According to Sir Richard, once officials know that Ministers view certain developments or people favourably, they will do their best to help the endeavour or the individual. The result is that help is given not because it is in the British national interest, but because it is in the interests of the Labour party.
	Last week, the Secretary of State for Trade and Industry said that the Government were not going to stop talking to business. No one is suggesting that they should, but the right hon. Lady should know only too well that what is poisoning the Government's reputation is the growing perception that the way to influence the Government is not by speaking to Ministers and officials, but by supporting the Labour party. As the Secretary of State said in a speech:
	we should all be worried about what happens to the health of our democracy if such cynicism takes hold.

Brian Wilson: The hon. Gentleman mentioned Sherlock Holmes. Before he gets too deeply into conspiracy theories, I want to test one out on him. Is he aware that Tuscaloosa, the Corus subsidiary in the US, is a member of the American Iron and Steel Institute, which is campaigning for the introduction of the US steel tariffs? Does he agree that that suggests that companies behave in different ways according to the location of an interest within a multinational? Yesterday I visited Corus at Stocksbridge. It is a fantastic business that is working closely with the Government and greatly appreciates our support. Will the hon. Gentleman spin the same ludicrous Sherlock Holmes conspiracy theory charge against me if I support, encourage or collude with Corus in any way in future because of what its American subsidiary says?

John Whittingdale: First, I would be very surprised to learn that Corus had authorised its American arm to give 400,000 to the campaigning organisation that is pressing for the imposition of US import controls. Secondly, I am sure that the Minister will want to visit LNM Holdings in this country and to congratulate it on its work in support of British interests, but he will be hard pressed to find anybody, as most of the people involved do not live or work in this country.
	Despite all the best efforts of the Secretary of State and the Minister to brush this matter under the carpet, it is not going to go away. Yesterday, my right hon. Friend the Leader of the Opposition wrote to the Prime Minister pointing out that the statements made by his spokesman have now been clearly shown to be untrue. Unless these matters are cleared up, they will leave an indelible stain on the Government. The only way of avoiding that is to conduct the full, independent public inquiry for which the motion calls. It is for that reason that I urge the House to vote for the motion. 5.10 pm

Alan Howarth: I think that Plaid Cymru and, I am sorry to say, the Conservative party, have not exercised good judgment on this matter. No one believes that my right hon. Friend the Prime Minister would be improperly influenced by a donation to the Labour party; the country knows that it is simply not in his character. As long as Opposition parties continue cynically to peddle this garbage, they will do no more than demonstrate the bankruptcy of their own thinking and the fact that they have absolutely nothing useful to say about policy and how to support the British steel industry and help it to thrive. They have not done themselves any good politically, as was evident, in the recent Ogmore by-election, and they have done politics a disservice. By flaunting an obsession with sleazeand, indeed, fabricated sleazethey persuade all too many of our fellow citizens that politics is a squalid affair. That is a damaging thing for them to do.

Alex Salmond: Will the right hon. Gentleman cast his mind back to when he sat in Parliament as a member of a different party and the Labour party ran a sustained campaign against the Conservativessome of us felt that it was very justifiedon the basis of sleaze? What did he think of that campaign? Did he think that the personal probity of the then right hon. Member for Huntingdon, John Major, was in doubt? His views on these matters seem to have developed as he has developed his political career.

Alan Howarth: I believe absolutely in the personal probity of the then Prime Minister and I take the same view now as I took then: such things do politics no good at all.
	It is absurd that it has been alleged that the Government were indifferent to what might happen to Corus and that their sole concern was to benefit Mr. Mittal and LNM. At least since summer 2000, and for many months afterwards, my right hon. Friends on the Front Bench did everything that they possibly could to find ways to get alongside Corus and see what could properly be done to avert the threatened closures and support Corus and the UK steel industry. I have a thick file of correspondence and notes of discussions from that time with the First Minister, my right hon. Friends the Secretaries of State for Wales, Trade and Industry and Education and Employment, the Chancellor and the Prime Minister. In that period, my right hon. Friends experienced great frustrations that derived partly from the nature of the rules of the European Union, but also very much from the attitude of Corus. As we know, the European Union rules on state aid are stricter in respect of steel than of coal or the automotive industry. The steel aid code of the European Coal and Steel Community prohibits aid for the rescue from closure of a steel plant.

Simon Thomas: Will the right hon. Gentleman give way?

Alan Howarth: Not at the moment; perhaps I shall do so later.
	Exceptionally, under article 95 of the ECSC treaty, it is occasionally possible, if there is unanimous agreement from the European Council, to go further in providing aid. The unions, including the ISTCit gives me pleasure once again to express my thanks and congratulate the ISTC on the part that it playedproposed a scheme to preserve most of the jobs that were earmarked for cuts in Corus's announcement of 14 February 2001. My right hon. Friend the Prime Minister met representatives of the steel unions. Having been present at that meeting, I can bear witness to the fact that he listened with the utmost care to the case that they made to him, was persuaded by it and supported it.
	Consequently, the then Secretary of State for Trade and Industry agreed to approach the European Commission and member states on the basis of article 95. A working party of Whitehall officials, Assembly officials, union representatives and Corus personnel was set up to pursue that project. Howeverthe ISTC will bear witness to thisCorus participated only reluctantly. It did not take the initiative seriously and confirmed its closure decisions before it had received the EU response to the application under article 95. As my right hon. Friend the Secretary of State for Wales said, it was determined to take out the capacity that it took out.
	In the months that preceded the announcement of its decision, Corus refused to share its thinking with my right hon. Friends or with any others who were naturally extremely concerned and had a locus in the matter. For example, Corus would not join the Llanwern taskforce. In December 2001, Sir Brian Moffat met my right hon. Friends the Secretaries of State for Wales and for Trade and Industry and the First Minister, but he did not clarify the company's restructuring plans. I understand that he was similarly unwilling to share his thinking with the Chancellor.
	My right hon. Friends naturally discussed the matter with the Prime Minister, who was intensely concerned about what might happen. The sole demand that Corus made was that the Government should act to lower the value of the poundthe demand that Plaid Cymru made then and has continued to make. That was disingenuous. It is not open to the Government simply to engineer a fall in the value of the pound, and to have done so would have had dangerous consequences for inflation and interest rates, damaging the industry that we were seeking to help.
	As hon. Members from all parties can confirm, Corus was equally unforthcoming in meetings of the Select Committee on Welsh Affairs and with Welsh Labour Members of Parliament. Those meetings were therefore unproductive.
	In his announcement on 3 May 2001, the First Minister said:
	We have worked almost on a daily basis with the unions to press the company to come to its senses and think long term.
	More recently, Michael Leahy, the general secretary of the ISTC, confirmed:
	We received the full support of the Prime Minister and the Welsh First Minister.
	So it is grotesquely wrong to allege that Ministers were not willing to do all that they could to support Corus, and especially shabby to suggest that it was because of some possible donation.

Simon Thomas: Of course, the hon. Gentleman is talking about allegations that have not actually been made.
	Let me return to his earlier point that the European Coal and Steel Community treaty forbids member states to give aid to companies like Corus or to the UK steel industry in general. That treaty is up for review in July. Does the hon. Gentleman agree with my hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price) that it should address the extension of investment aid, rather than operational aid, to the UK and European steel industries? That is especially important given the tariffs that are being imposed by the United States.

Alan Howarth: When a treaty of such fundamental importance is up for review we must be willing to approach it in an open-minded spirit. However, I would be wary of contemplating an opening of the gates to permit national competition in subsidies for any industry. We have had a great deal of experience of that, and by and large it does not make good sense.
	When it tragically proved that Corus could not be dissuaded from making large-scale redundanciesinvolving, as my right hon. Friend the Secretary of State reminded us, the loss of 3,000 steel jobs in Walesthe Assembly, supported by the Government, produced an excellent package to support those made redundant, their families and the communities that depend for their livelihoods on making steel. The original announcement provided for 66 million of support, which was followed by an additional 26 million. Of that, the Government directly put in an initial sum of 16 million. Of course, the Assembly was in a strong position to produce a large-scale package precisely because of the success that my right hon. Friend the Secretary of State had achieved in the previous comprehensive spending review.
	We in Newport are deeply grateful for the help that was given to usthe on-site advice centre at Llanwern, with the Employment Service, the Benefits Agency, Careers Wales, Education and Learning Wales and a variety of organisations, some from the voluntary sector, all providing a model of integrated support. That quality of support continues; only last month, a new advice centre was set up at the citizens advice bureau in Newport, funded by ELWa, for people directly or indirectly affected by last year's job losses at Corus. Case workers have been allocated to housing offices in the Alway and Ringland wards in my constituency, so I am very grateful for the sensitive support that we are continuing to receive.
	The Government negotiated with the European Commission to enable modernised iron and steel employees readaptation benefits schemeISERBSpayments to be made. Since then, the Welsh Development Agency has held meetings with about 100 companies in the Corus supply chain, which was so damagingly affected.
	The promised urban regeneration company is of particular interest for Newport because of its exciting potential. For more than a year, Newport county borough council and I have called for an urban regeneration company to be established for Newport, and I want to express my thanks again to my right hon. Friend the Secretary of State for his unwavering support for that project.
	The far-reaching complexity of the direct and indirect impact of Corus's decisions on the supply chain, the retail economy and the communities that make steel requires a multi-agency, integrated and sustained response. It is not just a matter of immediate damage limitationensuring that benefits are paid, that counselling is provided and that reskilling programmes are quickly made availablebut of developing a coherent long-term strategy that involves rebalancing the local and sub-regional economy, so that we achieve a better balance in south-east Wales between the public and the private sectors and between manufacturing and services and a more diversified economy, supported by the inward investment that the WDA continues to seek for Wales.
	We need to provide education and training of the very highest quality because, in a competitive global economy, unless our skills match those to be found anywhere in the world, our future will not be promising; we indeed need to be a learning society. We need investment in infrastructure, not only in road and rail, but in information technology. We need a sensible strategy on land use, and a commitment to very high standards of urban design. We continue to need a sensitive approach to nurturing and supporting the health, well-being and strengths of the communityfor example, the voluntary sector networks that are immensely important in Wales and certainly in Newport. We also need to ensure that, in our arrangements to carry forward that strategy in the future, we hear the voice of local peoplethose who have borne the brunt of industrial change and for whom our policies are principally intended.
	That analysis was confirmed and amplified by the excellent steel communities study, led by Professors Fairbrother and Morgan of Cardiff university, which was submitted to the Assembly in July last year. That integrated process ought to be led and owned locally and democratically, so I was delighted when the First Minister wrote in a letter to me on 29 June last year:
	In an area such as Newport, joint public/private sector action within the well focused and disciplined format of a company initiated and driven by the local authority would add real value . . . The sharing of objectives, budgets and decisionstogether with the Chancellor's promised tax incentiveshave the potential to make a real difference.
	As good as his word, on 31 January, the First Minister announced pump-priming funding for the new URC for Newport of 10 million immediately from the Assembly and 10 million over three years from the WDA, with a promise that the value added through the URC's activities would be recycled back into Newport to enable us to develop the process further.
	I would only say that we need early clarification of the structure and terms of reference of the URC. As it is, yet another consultancy has been set up, and I understand that we must wait some little time for the answers to those questions. I hope that when we have the advice of the consultants, it is that the mandate of the URC should be Newport-wide, but of course it must operate within the strategic context of south-east Wales and the five counties regeneration forum, which includes not only the Gwent local authorities but the WDA, ELWa and the Assembly. We have been waiting over a year for clarification on those points, and my constituents may be forgiven for being a little impatient now.
	We have had a mass of consultants, academic studies, agencies, boards and taskforces. All the different layers of government have been involved. They are all full of good will and make valuable contributions of ideas and resources. I pay particular tribute to Mr. Allan Martin, who willingly took on the chairmanship of the Llanwern taskforce. He and his colleagues have done great service in south-east Wales. However, this cat's cradle of overlapping programmes, budgets and accountabilities will not do. We need all the players around the table of the URC as quickly as possible, contributing their particular skills and resources in a unified effort. That way, there will be an opportunity for leadership, and we will achieve the integration of effort, decisions, action, momentum and results.
	Meanwhile, the communities who draw their livelihood from steel in the United Kingdom await tensely the decision that we expect to hear announced by the Bush Administration tomorrow. Last June, President Bush announced the possible activation of section 201 of the US Trade Act 1974 to protect the USA from steel imports. Already, there has been a host of measures that, to me, look pretty protectionist, and in the first 10 months of last year US steel imports were down by 25 per cent.
	The US International Trade Commission is now calling for blatant protectionismtariffs of up to 40 per cent. and quotasin what would be clear violation of the rules of the World Trade Organisation. The problem is that uncompetitive US steel producers face great difficulties in a period of global overcapacity, and of course it is election year in the US. We well understand the miseries of restructuring. In the 1980s and 1990s, Wales and Europe as a whole went through that process. Throughout, however, European markets were kept open and strict rules on state aid for the steel industry were formulated and adhered to, even during the period when the number of steelworkers employed in the Community, enlarging as it did during that period, halved.
	The ability of Corus to maintain its newly reduced configuration in the United Kingdom depends on the strength of its UK customer base, and any swamping of the UK market by cheap imports displaced from the USA would be a major disaster. I am delighted that my right hon. Friend the Secretary of State stands shoulder to shoulder with EU Trade Commissioner Pascal Lamy in making it absolutely clear that the cost of restructuring the US steel sector should not be shifted on to the rest of the world. The EU supplies about a fifth of steel imports into the USA, and we would be worse affected than Canada, Mexico and Brazil.
	Europe should be open-minded about possible federal or state subsidies for what are termed the legacy costs of pensions and health care for the industry. It might not be a wise decision for the Americans to take, but it should be a decision for them. We cannot accept that there should be tariff barriers leading to a diversion of steel exports to Europe in order to shelter the US industry from the necessary structural change.
	As Mr. Lamy has said, to listen to the debate in Washington one would think that only US steelworkers have families and mortgages, which is not the case, as we all know. I am glad therefore that my right hon. Friend said firmly yesterday:
	Should the US propose significant action we would strongly support any moves by Pascal Lamy to seek WTO settlement action . . . We defend our right to consider options for preventing serious injury to the industry, including the possibility of safeguard measures.
	There are problems about the slowness of the WTO procedures. It can take more than a year for the WTO to arrive at an initial finding. The European Union's procedures have also been criticised as glacially slow. However, the will now exists in the EU to act rapidly and effectively.
	In the time that it might take the EU or the WTO to get their acts together, our industries and communities could be badly hurt. The EU is permitted by the WTO rules, unilaterally and without seeking authorisation, to restrict imports of dumped steel from third countries. It must take that action if tomorrow's announcement proves as negative as it may be. I hope that the diplomacy undertaken by the Government and the European Union have persuaded President Bush against the decision that we apprehend that he might take. The Prime Minister's phone call to the President last Thursday and the call made by the Secretary of State for Trade and Industry to the United States Commerce Secretary yesterday make it clear that in this and other matters, my right hon. Friend and his Ministers are acting firmly and decisively in the interests of the British steel industry.

Vincent Cable: I congratulate Plaid Cymru on identifying a topical subject. I do not know whether it owes more to good luck or good management, but the party's timing in introducing a debate on steel the day before the American announcement was certainly deft.
	The central charge made by Plaid Cymru was that the Government had acted wrongly in accepting political donations from a man and a company said to have acted against United Kingdom interests. The problem is that one charge is right and another probably not right. The right charge, emphasised by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) for the Conservatives, is that Mr. Mittal has campaigned for tariffs in the United States. If that is true, that action is damaging. Its impact would be somewhat diluted, however, if the Minister for Industry and Energy was correct in saying that Corus had done exactly the same. If that is true, Mittal is just one of a series of lobbyists who have behaved badly, but he is not unique in that.
	I have greater difficulty with the other charge, which is that Mittal activities in Romania are contrary to the interests of the British steel industry. The Secretary of State made some telling points on that. I fear that I detected in at least some of the remarks of the hon. Member for East Carmarthen and Dinefwr (Adam Price) a strong hint of economic nationalism. That did not increase the force of his many good points.
	The logic of what will happen with Mr. Mittal's venture in Romania is either that it will have no impact on the UK industry or that it may even prove favourable. There are two reasons for that. First, one of the consequences of privatisation in eastern Europe is that it effectively stops the normal practice by which state-owned steel companies dump products by selling below cost or at variable cost. When a company is privatised, there is no incentive to do that. Why should Mittal sell at a loss? He is interested in short-term profit and it would make no sense for him to sell at a loss. The argument that he would undercut British workers' jobs is patently implausible. In fact, Mr. Mittal's intervention will probably increase discipline in the industry.
	The second point is that Mr. Mittal is, to put it bluntly, an asset stripper. He will remove a lot of capacity from the Romanian industry. That is probably why he has taken it over. One of the central problems with the steel industry, globally and in eastern Europe, is that capacity is too great. He is not doing it for idealistic reasons, but Mr. Mittal will, because it fits the logic of his business, probably act in ways that will, in a back-handed way, turn out to help our steel industry.

Simon Thomas: The hon. Gentleman makes an optimistic assessment of the likely effect on the steel industry. Will he consider an alternative scenario that is not an imaginary but a real one? When Ispat took over steel in Ireland, it had a five-year contract to keep the plant open. Two weeks after that contract ended, the plant closed. As a result, several companies, including Allied Steel and Wire in Cardiff, lost a huge amount of money owed by Ispatone of Mr. Mittal's companies. That company now finds it hard to obtain lines of credit in the United Kingdom because so many investors have had their fingers burned by Ispat's dealings in Ireland. Now the hon. Gentleman may be right

Madam Deputy Speaker: Order. Interventions are meant to be brief.

Vincent Cable: I did not entirely follow the hon. Gentleman's rather complicated story, but if it is true that the Irish plant was shut, as he says, I would have thought that that undermined his argument that Mittal is investing overseas in a capacity that competes with UK workers. None the less, on this particular charge, the argument that the Romanian enterprise is taking jobs away from British workers is extremely flimsy.
	The serious issue, which the Conservative spokesman and the right hon. Member for Newport, East (Alan Howarth) were right to emphasise, is the damaging consequences of what may happen tomorrow. Whether or not we get a statement from the Secretary of State for Trade and Industry, we should spend some time reflecting on this matter. The problems in the United States steel industry have very little to do with trade. There are two central problems, one of which is that there has been a big technical change in the industry. The mini-mills, which represent the new technology for steel production, are gradually replacing the big mills, and the big mills are losing vast amounts of money.
	The second problem for the American steel industry is that the dollar, like the pound, is massively over-valued for manufacturing industry, which is losing pots of money. Manufacturers are running to the Governmentjust as they do hereto appeal for help. As the right hon. Member for Newport, East mentioned, there is a way to help. If the American Government were seriously interested in the welfare of the workers, there would be plenty of ways of helping themthrough retraining or pensions, for example.
	The manufacturersthe companieswhich are very close to the Bush Administration are not interested in that, however. They want something that will increase their profit margins, and the best way of doing that is to introduce a tariff, because that pushes up their domestic prices. This is naked self-interest by the producer interest groups in the United States, backed by the United States Administration.
	This battlethis trade warcould well have wide ramifications not only for the steel industry but for many others if it gets out of control, and the issue that we must now face is how we are going to respond to it. There is one sensible response and one very unhelpful one. The unhelpful response is to start clamouringas one or two Members didfor Europe to put up its own barriers against so-called cheap imports. I think I heard the phrase floods of cheap steel being used, in the context of needing to put up our own barriers against them. That would be wholly unhelpful. First, that response would do nothing to deter the United States, which is not an exporter of steel. Secondly, it would do great damage to our own steel-using industries, which employ far more people than the steel industry. It is an entirely perverse, illogical response that would do a great deal of harm.
	What ought to happenI agree that it is difficultis that the European Union, pushed by the British Government, should act within the framework of international law. The World Trade Organisation has shown that it has teeth. Only a few weeks ago, it instigated a powerful action against the United States over illegal subsidies. There is no doubt that the European Union, acting within the rulesI think it is article 19 that applies to the kind of safeguard actions that obtain in the UShas every right to introduce targeted retaliatory action against the United States.
	The real test for the Government is not how the Prime Minister responds to Mittal but how he responds to his friend President Bush. The Prime Minister has invested an enormous amount in that relationship, and he may well now have to confront him on the ground that the American Administration are doing something very damaging to the western world, to Britain and to international tradesomething which will have to be fought. That is the issue with which we may well be confronted in the coming weeks.
	A second issue relates to the lobbying that took place on behalf of Mittal. The Plaid Cymru spokesman expressed genuine shock at the way in which British officials and ambassadors cheerfully run round doing errands for companiesin this case, one with a rather tenuous relationship to the United Kingdom. He is right to be shocked. It may surprise him to learnI do not think that it will surprise the Conservatives, because they saw this in action when they were in governmentthat, unfortunately, this is the way British Governments of all parties behave.
	I know that because, as a civil servant, I drafted many of the letters that go to British ambassadors telling them to fight for company X or company Y. Many of the mainstream British companies with a lot of jobs here are just phantom companies whose representative a Minister may have met at a cocktail party. I do not know whether such companies gave donations. There is a deeply embedded traditionbased on the old idea of Great Britain Ltd.that it is the job of Ministers to run errands for companies that portray themselves as British. It is a dangerous tradition, particularly in a world of globalised companies. As the Secretary of State rightly said, Toyota and Ford have more right to be called British companies because of the jobs they create than many companies which call themselves British and fly the Union flag.
	The system whereby British officials and ambassadors and the Ministers who direct them are running round the world, as the Foreign Secretary did with BAE Systems last week, selling Hawk jets to India, is not the sort of thing in which the British Government should be engaged. I hope that the Government will take to heart the painful lesson learned from the Mittal affairthat that is an area of Government activity that needs to be tightened up.
	Another area where Government activity needs to be tightened up is that of political donations. No one pretends that the Government are unique in accepting money from companies, but we are travelling down a slippery slope, heading towards an American type of system whereby Governments of all parties take money from large companies who expect favours in return. It may well be that no commitment to return the favour has been entered into, but the expectation is there.
	In the United States, that process has reached an advanced stage. Companies give money and they expect ambassadorships and to be on commercial delegations for negotiation purposes. Here the process is much less advanced, but it is a dangerous and corrupting process. If the Government saw the danger that is being created, they would stop it.
	The way to stop the process is to put a severe cap on donations to political parties. The Government have taken the first step in political reform, which the Secretary of State rightly described as a major step forward, by making the process of donations transparent. The next step is to say that companies should not give money to political parties. Companies such as BP and Shell do not do it anyway because they realise that it tarnishes their image. That should now become part of our electoral law. There should be a strict limit on individual donations to political parties. A combination of that reform, possibly augmented by state funding, is needed to clean up British politics. If Plaid Cymru's motion helps us a little along that road, it will have performed a public service.

Llew Smith: Most hon. Members would accept that when the Government say or do anything that I think is wrong I say so, and vote accordingly. I have too much respect for the community that I have the privilege to represent to do anything else. I have long said that I am opposed to the Labour party taking donations from big business. That is not a recent idea but one that I have held for many a long year.
	To say that is not to accept the arguments that have been reiterated by the nationalists during the past few weeks, however. It is ironic that those who now pretend to be the champions of the Welsh steel industry and its workers were hardly to be seen when some of us were involved in the struggle to defend those plants and jobs.
	In my constituency of Blaenau Gwent, which was hit worse than any other community in the United Kingdom, the local trade union officials had no contact with the local nationalists. The nationalists spent most of their time writing in the correspondence columns of the local newspapers attacking the Labour Government and everyone else who was trying to support the unions and defend the jobs. What they have said during the past few weeks is utter nonsense and I want to concentrate on two of their arguments.
	First, the nationalists have argued that jobs have been lost and plants have been closed, as in my constituency, because the Government did not offer Corus a favourable enough package, since they were more interested in placating and responding to the views of Mittal. Secondly, and linked to that, they have argued that the lack of Government support resulted in the failure of the workers' buy-out and, in particular, the buy-out by the Iron and Steel Trades Confederation at the Llanwern plant. Both those accusations are nonsense.
	When we were campaigning to save the plant and the jobs, and in many other ways to save our communities, I had many meetings with the Prime Minister, the Secretary of State for Wales, Assembly Members, local authority representatives, trade union officials both local and national, and the chief executive of Corus. It became obvious to me when I had meetings with the Prime Minister and the Secretary of State for Wales that they had the impression, from talking to and negotiating with Corus, that it was not interested in any package, no matter how big or small.
	One could argue that I, the Prime Minister or the Secretary of State would say that anyway. However, I and other Labour Members met Moffat and asked him what he required of the Government in order to maintain the jobs in the UK steel industry, and in particular in my plant in Ebbw Vale. His response was direct. He said that there was no package, no matter how big, which could persuade Corus to go back on its commitments. He said that Corus had a visionif vision is the right wordof the steel industry's future and that it intended to go forward with that.
	When we met Moffat we also put to him the charge that Corus was unwilling to support a workers' buy-out or the proposed buy-out by the ISTC of the Llanwern plant. Once again we asked him whether there was any Government package that could persuade Corus to sell that plant to the ISTC. Once again, Moffat was direct in his answer. He said that there was no package, no matter how big, which would persuade Corus to sell Llanwern to the ISTC, because to do so would be to increase the competition against it.
	Some of us found that not only offensive but ironic. Throughout our political lives we have always been told by the right that public ownership equals monopoly and is bad, while capitalismfree enterprise, as it is laughably calledequals competition. But here we had the situation where a union was willing to buy out a plant in order to maintain jobs and the community, but was refused the opportunity to do so because one of the bastions of capitalism, of that free enterprise system, refused the union the right to do so. That is a funny type of competition. I came away from that meeting utterly despondent about the future not just of my plant in Ebbw Vale but of the steel industry in general.
	The nationalists have done a great disservice to working class communities and steel communities such as my own. Contrary to the opinions that Corus may express, there is no doubt that it is the guilty party. I remember when Corus was formed. I had a phone call from one of its managing directors, Vickers. He rang me at 8 am from Holland saying that he wanted to confirm that there was no threat to the Ebbw Vale plant, that it had a secure future and that everything on the horizon was good. But it was obvious from day one that those were merely words, because it was clear that Corus was bent on asset-stripping the industry.
	If anyone doubts that, they should look at the old balance sheet. Corus appropriated 863 million from the surplus in the British Steel pension fund and paid out 694 million to its shareholders. When we met Moffat he accepted that if Corus had not paid out that 694 million as a massive sweetener, its shareholders would not have agreed to the takeover. Corus also paid out millions upon millions of pounds to former directors, and, in particular, to its chief executive, Bryant. It also handed out millions upon millions of pounds to senior managers, once again to placate them and to line their pockets.
	I have spoken to several people in and outside the industry since then. Many have expressed shock and horror at Corus's possible involvement in that act of asset stripping. To me, it was no surprise at all. Moffat is on record as saying that the company is in business to make money, not steel.
	It is true that people in my community who devoted their lives to the steel industry worked for moneythey had to pay the rent or the mortgage, and feed their children each and every daybut their involvement in the steel industry was somewhat different. They took pride in that industry and craft, and took great pleasure in building the Llanwern plant into the most effective and productive in the world. In return, they received a closure notice from people whose only interest in the steel industry is the money that they can make from it. The nationalists argued in the past few weeks that the blame lies entirely with the Labour Government, but in doing so they diverted attention from the real enemies: Corus, Moffat and the shareholders, who asset-stripped that industry and did their damnedest to wipe out my community.
	As a past student of Coleg Harlech, Madam Deputy Speaker, you will know that one of my predecessors was Aneurin Bevan. Nye had something important to saya phrase that he often usedon issues such as this:
	This is my truth: now tell me yours.
	What I have said today is my truth, and I know it to be true because I was there. I was part of the struggle to maintain those jobs and that industry. It is sad that the nationalists have not followed that example. Once again, they have come down on the side of the bosses against the workers.

Pete Wishart: I am delighted to follow those bizarre closing remarks, and I promise to be brief.
	I want to start on a positive and perhaps consensual note by expressing my gratitude to the Government Whips for helping us to secure today's debates. You may be aware, Madam Deputy Speaker, that there is a new arrangement whereby we in the minority parties now represent ourselves in dealing with Government Whips. We have found that productive and useful, and we are delighted to be relieved of the dead hand of Liberal Democrat representation in Committee. Towards the end of our relationship, our Liberal Democrat colleagues were actively acting against our interests, so we are pleased to be shot of them. It is important that the minority parties have something to contribute, and we are pleased that the necessary structure and arrangements are now in place. We look forward to many more such days.
	I want to congratulate my hon. Friendit is good to be able to say that, as an SNP Memberthe member for East Carmarthen and Dinefwr (Adam Price). I hope that I have not put back SNP/Plaid Cymru relations by perhaps pronouncing the second part of his constituency incorrectly. It is he who has unearthed and led on this issue, and who has tried to expose a new, murky dynamic involving donations by key individuals and business men, and key Government concessions. He has dominated the issue and become the major opposition, and I congratulate him on unearthing it.
	The SNP has major concerns about what my hon. Friend has uncovered. As the hon. Member for Motherwell and Wishaw (Mr. Roy) will know, we in Scotland once had a viable, productive and efficient steel industry. Ravenscraig was one of the largest steel producers in Europe. In fact, it made excellent flat-rolled steel, produced in the distant steel mill in Kazakhstan that is now owned by Mr. Mittal, which he acquired with the assistance of Government money. I wish that a Mr. Mittal had been around in the 1980s, when the Scottish steel industry started to experience difficulties. Perhaps we could have encouraged him to try to get Government investment in Scotland. If such a figure had existed in those days, we might well have secured some jobs and retained a steel industry to call our own.
	We are concerned not only about recent events in the steel industry, but about a further cash for access issue. Scotland on Sunday recently highlighted the case of Snowie, a waste company that donated some 5,000 to the Labour party in Scotland. Five months later, it secured some 30 million-worth of work. Snowie handed over the money after it was awarded clean-up work by the Department for Environment, Food and Rural Affairs and the Scottish Executive, following the foot and mouth epidemic.
	There is also the case of Ballathie Estates, a hunting and fishing estate on the River Tay, in my Perthshire constituency. Its director, Mr. John Milligan, was recently appointed chairman of the Scottish new deal advisory taskforce after giving some 25,000 to the Labour party.
	Finally, there is the case of Hunter Esson, a director with Aberdeen-based Esson Properties, who said that he could not imagine why anyone would think that his company's 5,000 donation to Labour had any impact on the decision to grant it planning permission to build on greenbelt land.

Frank Roy: Is the hon. Gentleman saying that that donation was dependent on the granting of planning permission? Is he saying that that director had to pay for planning permission?

Pete Wishart: I am coming to that point.
	All those cases might indeed be legitimate and above board, and I am not trying to suggest that any wrongdoing took place, but the perception is that something was not quite right. We should remember that this is the Government who were going to remove sleaze from politics, who were going to be whiter than white, who were going to clean up politics. They have had five years to do so, and the key question that must now be asked is this: what do such companies think they are getting in return for the money that they give to the Labour party? We have not received a satisfactory answer or explanation. Perhaps they are simply big investors in this socialistor third wayLabour party, but I suggest that it goes beyond that.
	It is not simply a question of what Mr. Mittal thought he was getting in return for his 125,000 donation to the Labour party. Why were the Government intervening in the first place in the fate of a Romanian steel plant that Mr. Mittal wanted to acquire? Anyone who carries out even five minutes' research into the current state of the steel industry will know that there is massive overproduction and overcapacity throughout the world. As has been mentioned, a Mittal-owned plant is lobbying the Bush Government ferociously to impose curbs and ensure tariff control for the United States.
	I agree with the warning from the hon. Member for Liverpool, Walton (Mr. Kilfoyle) about the Labour party's business links. He is the one brave soul in the Labour ranks who has questioned the judgment of the Downing street aides who allowed the Prime Minister to sign the letter to his Romanian counterpart. The hon. Gentleman said:
	What I'm not happy with is an outcome where you have a company seemingly supported by the British Government which is acting against the interests of British workers.
	That is the key issue, and I could not have put it better myself. We cannot allow any perception of a conflict between Government support for business and support for the Labour party, and that is why I ask Members to support the motion.

Hywel Francis: As a representative of the steel constituency of Aberavon, I take this opportunity to thank on my constituents' behalf the Secretary of State for Wales, whose constituency of Torfaen is also a great steel constituency. He and the Labour First Minister of the Assembly have made great efforts to support the Welsh steel industry in the past year, which has arguably been the most difficult in our history since the war.
	I also welcome the Government's commitment to referring the United States to the World Trade Organisation if it introduces steel tariffs. Hon. Members on both sides of the House should welcome that, and we should also welcome the support of the Secretary of State for Trade and Industry for the introduction of safeguards to ensure that steel currently sent to the US by non-EU countries is not dumped in the EU. Further to that, the House should demand that Corus in the USCorus Tuscaloosaunequivocally oppose US tariffs.
	While my constituency has not borne the job losses experienced elsewhere in Wales, we have had our own terrible tribulations, with the tragedy on 8 November 2001, when the explosion at the No. 5 blast furnace in Port Talbot resulted in the deaths of three steelworkers. Thankfully, all the injured men have now been discharged from Morriston hospital, thanks to the dedication and skills of staff in the burns unit.
	This debate affords those of us from steel communities the opportunity to review the very considerable efforts that have been made in the last year by the Labour Government and the Labour-led National Assembly in partnership with many bodies, including my own union, the Iron and Steel Trades Confederation.
	The pretext for this debate, on the face of it, is one company and one political donation, but we believe that the real issues facing the industry, steelworkers and our communities are being addressed by the Labour Government in real, tangible and constructive ways. As secretary of the newly formed all-party parliamentary group on steel, I am well aware of the efforts made not only by our Labour Government here in Westminster, the Labour-led Welsh Assembly and the many Labour authorities in Wales and throughout the United Kingdom but by the many agencies and private sector companies that have worked together in social partnerships to rebuild and diversify our local economies.
	In my own constituency, we have the welcome news from Corus of the 75 million investment in rebuilding the No. 5 blast furnace. We also have the announcement by the Welsh Assembly of the establishment of an advanced technology centre at Port Talbot, which will bring together Government agencies and the very best applied research in our Welsh universities to drive forward innovation in the industry. We have the continuing very good progress of the new Baglan energy park, again through public and private social partnerships, notably with General Electric, the Welsh Development Agency and Neath Port Talbot county borough councila Labour authority that has been outstanding in its efforts to diversify the local economy. Next Monday, we launch our own Afan community credit union, with strong support from the ISTC and the Welsh Assemblyyet another example of how we are getting on with the job of rebuilding and serving our steel communities.
	Across Wales, great efforts have been made by the main steel union, ISTC, and all the other unions in the industry, Steel Partnership Training, UK Steel Enterprises and Steel Action. All those bodies have placed great emphasis on the acquisition of new skills and new learning opportunities. I am proud to say that one such initiative, the newly formed Port Talbot union academy, links into the new local community learning network in my constituency, established through objective 1 funding, which our Government achieved.
	Too many Opposition politicians tend to undervalue the efforts and achievements of the past year. Who on the Opposition Benches applauds my hon. Friend the Member for Blaenau Gwent (Llew Smith), who has consistently championed the steelworkers of Ebbw Vale? In the wake of the redundancy announcement last year, through his efforts and the efforts of Lord Brookman of Ebbw Vale, as well as those of the local Labour Assembly Member, Peter Law, and the Labour authority, we have the reopening of the passenger train service to Ebbw Vale and the new UK steel enterprise innovation centre. The new centre will be launched at Victoria, near Ebbw Vale, at a cost of 3 million, to assist local start-up enterprises.
	It is clear that steel and manufacturing are still major players in the Welsh economy. Manufacturing accounts for more than 18 per cent. of employment in Wales. Corus has made it clear to our Government that Wales is now a place where world-class steel production can take place and says that it is committed to achieving that.
	Much has been done in the past year that deserves praise. The Prime Minister and other Ministers supported the attempted ISTC workers' buy-out at Llanwern. The Secretary of State for Trade and Industry, the Foreign Office and the Prime Minister have all been unequivocal in their condemnation of possible US tariffs on British steel exports. The possible announcement tomorrow of such tariffs will add to the existing difficulties faced by large companies such as Corus. They have already identified issues relating to tax, transport and energy costs, which they consider to be challenges for them, and the imposition of a US tariff would only add to those problems.
	It would be appropriate for this debate to focus on those challenging issues rather than the irrelevance of trying to link political donations to the Government's policies. As internationalists, and as supporters of European enlargement and the modernisation of the global steel industry, we should be proud of what our Government are doing in Westminster and Cardiff.
	I trust that my right hon. Friend the Secretary of State for Wales will convey to both the Prime Minister and Mr. Mittal our expectations that every effort should continue to be made to prevent such tariffs from being introduced. That should be done in the spirit of extending and strengthening our Government's commitment to developing corporate social responsibility.
	I arranged for the all-party steel group to write to Mr. Mittal last week urging him to support the aims of our group, in particular our desire to ensure a fair deal for the UK steel industry and to aid the regeneration of steel and former steel communities.
	We would all concur with the words of the First Minister of the Welsh Assembly, Rhodri Morgan, earlier this year when he said:
	The new blast furnace which will be constructed at Port Talbot will not only be a memorial to those who lost their lives but also a symbol of the endurance of an industry vital to Wales and its continuing contribution in the years ahead to this country and the communities that serve it.
	He continued:
	There are no quick fixes to problems as entrenched as those of our long neglected industrial communities. I believe that the programme set out
	by the Welsh Assembly
	is a new start and the strongest possible expression of faith in the future of these communities.
	Modern Wales was built on and built by those great steel communities. Historians have written that the building of Margam steelworks in my constituency was a symbol of Labour's commitment to the reviving of south Wales in the post-war period. Margam in its day was the greatest steelworks in Britain and the historian Dr. John Davies saw its creation as one of the three great political landmarks of post-war Wales.
	I find it encouragingindeed, propheticthat the rugby sides enjoying success this year are from the great south Wales steel towns of Aberavon, Newport, Pontypool and Ebbw Vale. Unlike Opposition Members, we can speak legitimately for steel communities and former steel communities in Wales and throughout the United Kingdom. We are proud of what our party in government is doing to address the serious challenges facing our industry. That is why Labour Members took the initiative to establish the new all-party parliamentary group on steel, and I urge all Members, of whatever party, to assist us in our objectives of ensuring a fair deal for the UK steel industry.
	This year, steelworkers in Port Talbot celebrate a centenary of steel making. The industry continues to be a very significant contributor to the economy of the region. It is my belief that Labour's policies assist, even in these most difficult times, in sustaining our steel communities and in assisting those who wish to develop new initiatives to achieve a more diverse local economy.
	I shall end with the words of David Ferris, the chair of the unions at Port Talbot steelworks. We would all do well to listen to and show some respect for the steel unions. I only wish some partiesdaffodil Tories allhad done so after the explosion in Port Talbot. David Ferris said this to me yesterday:
	What Labour is doing today is to be welcomed by all of us: it is comparable with our achievements after 1945.

Bill Wiggin: I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on his speech and it is no accident that my speech is written on a brown envelope. It is nice to follow the hon. Member for Aberavon (Dr. Francis), who demonstrated clearly how the Government give with one hand and take with the other.
	I wish to question the role of the Secretary of State for Wales in this debate. I was led to believe that his role was to act as a liaison between the National Assembly and the Government, and to perform his duties by ensuring that the funding for the Assembly was as successful as possible. It is a great shame that he has come before us today to defend the actions of the Prime Minister.
	It is the role of the Prime Minister that is called into question by the letter that he signed in support of Mr. Mittal and his purchase of the Romanian steel mill. The question about the Government's support for that has not been answered. Many hon. Members have already asked how many other companies have been assisted in the same way as Mr. Mittal. How many other small businesses have been helped by a letter from the Prime Minister? I have written to the Prime Minister many times and I have even invited him to come to Hereford to see our hospital for himself. However, he has not written back to me. We need to know how many other companies have been helped. [Interruption.] I am not sure that I could afford 125,000. If I could manage 50 grand, who knows, perhaps I could be running the BBC.
	One of the temptations for a governing party is the potential corruption that any funding from a company could bring. The Government knew about that when they took office in 1997. Their crime is that they did not learn from what history taught them. Whether or not Mr. Mittal is as British as I am is a question that needs to be answered. How were the donations given, and did the Prime Minister know about that before he signed the letter?
	The human side of this affair is the effect it has on people's jobs. Anyone who has been made redundant will know the misery and despair that goes with it, and usually it is through no fault of their own. I have been made redundant once in my career, and it is a terrible thing. Before Labour Members jeer, they should wait until after the next election when they will realise what it feels like. I should have hoped that they would show sympathy for people who may have lost their jobs through the Government's actions, and I am disappointed that I have been heckled. We should have great sympathy for workers who have lost their jobs

Llew Smith: There is a slight difference between someone being made redundant in Blaenau Gwent, which is one of the poorest communities in the United Kingdom where people have difficulty paying their mortgage or rent, and someone like you who may be have been made redundant in the past

Mr. Deputy Speaker: Order. The hon. Gentleman must remember to use the correct parliamentary language in the House.

Bill Wiggin: Redundancy does not matter; what matters is the misery that goes with it. It does not matter who it applies to: what matters is what is going on.

Llew Smith: Will the hon. Gentleman give way?

Bill Wiggin: I shall give way again, because the hon. Gentleman did not finish his remarks.

Llew Smith: Is the hon. Gentleman saying that there is no difference between a person who is made redundant and has nothing in the bank and a person who is made redundant who has 1 million in the bank?

Bill Wiggin: If the hon. Gentleman is implying that I have 1 million in the bank, I have not: I wish I did. No Romanian has bunged me anything recently. [Interruption.] My envelope is from the Department for Transport, Local Government and the Regions.
	I hope that we get a more truthful answer when the Minister winds up the debate. I also hope that he will describe the criteria he is using to judge the Welshness of the companies that are accompanying him to the Czech Republic. Perhaps he will take the opportunity, highlighted by the hon. Member for Blaenau Gwent (Llew Smith), to apologise to all those who have been put out of work by the Government's actions. Will he tell us how many other companies have been helped? The Liberal Democrats tell everyone that they oppose the Government, so why were they so quick to leap to their defence in that shameful fashion?
	The lessons from this scandal, which has rocked the Government, are that Governments must be brave enough to resist such temptation and that none of us must ever underestimate the misery and sadness that goes with redundancy. Every effort must be made to prevent that, especially in Wales.

Martin Caton: It is a great pleasure to follow the hon. Member for Leominster (Mr. Wiggin), who is always amusing, even though he talks nonsense. It is an even greater pleasure to follow my hon. Friend the Member for Aberavon (Dr. Francis). I pay tribute to the work that he has done following the terrible tragedy in the steelworks in his constituency. He has visited families and given support, but most of his efforts have been unsung, and he deserves credit for them.
	It has been something of a groundhog day for those of us who attended the Welsh day debate last Thursday. It is more in sadness than in anger that I contribute to the debate. Opposition Members have chosen to link two important issues, each of which should be the subject of debate in the House at this time and in the weeks and months ahead.
	The first issue is the danger to our democracy and to the perception of democratic politics of political parties relying on large donations from individuals, business or industry. The second is the recent history of the steel industry in Wales and the rest of the United Kingdom and, just as important, the future for steel and other manufacturing industry in our country. Plaid Cymru has tied those tremendously significant matters together with a connective tissue that artificially tries to make the central focus an unsubstantiated allegation of Government impropriety.
	At its nonsensical extreme, articulated by the hon. Member for Ribble Valley (Mr. Evans) in last week's Welsh day debate, the link becomes causal. That must be the implication of his call for the Government to ask
	the 6,000 people who lost their steel jobs in the United Kingdom whether they prefer to be on the dole while the Prime Minister supports competitors in Romania.[Official Report, 28 February 2002; Vol. 380, c. 881.]
	The same line was taken by the hon. Member for East Carmarthen and Dinefwr (Adam Price), who asked:
	Does the Prime Minister care more about his billionaire friends . . . than the families in the steel communities that have loyally supported the Labour party for more than 100 years?[Official Report, 28 February 2002; Vol. 380, c. 917-18.]
	What about this afternoon's debate? In a reply to an intervention asking whether the hon. Member for East Carmarthen and Dinefwr was really suggesting that the Prime Minister wrote his letter to the Romanian Government deliberately to undermine the British steel industry, his hon. Friends and Conservative Members shouted yes, and he said, I think I'm getting somewhere. That is the level of the accusation.
	Not only is an unjustified and unjustifiable link being made between a donation to the Labour party and a letter from the Prime Minister to the Romanian Government, but the impact of the letter on that Government's actions has been exaggerated out of all proportion. We are supposed to extrapolate from that that if the Prime Minister had shown a similar commitment to Welsh and Teesside steelworkers, perhaps by writing a timely letter, thousands of jobs could have been saved. That is pure cloud cuckoo land, and everyone, including Opposition Members, knows it.
	A debate is rightly beginning about future funding of political parties. As has already been said, the Labour Government have introduced a transparency that was not there before, and they have capped total expenditure on general elections. Those are both valuable steps forward. Like many right hon. and hon. Members across the House, I believe that we should go a lot further.
	With large political donations there is always the danger that donors will want something in return. Many of the people whom we represent believe that there is or may be a payback time with such donations.

Pete Wishart: Will the hon. Gentleman give way?

Martin Caton: I am afraid that I do not have time to give way.
	At a time when fewer and fewer people are taking part in the democratic process, that must be a cause for concern.

Adam Price: So we are right.

Martin Caton: It is justifiable to raise the issue of party political donations, and Opposition Members could usefully have focused on it. Their accusation about the actions of the Prime Minister is unsubstantiated. They have had hour after hour to substantiate it, but they have completely failed to do so. I should like to talk about the more important issues that they failed to raise.
	The hands of all political parties must not just be clean: they must be seen to be clean. It is right to consider issues such as state funding of parties, radically reducing the total spend available to each party at elections, and extending the provisions in kind available to each political party, as we do with television time for party political broadcasts. I am sure that there are many related ideas on which we could and should focus. The debate could have centred around those ideas, as part of our discussion on how we re-engage with the sections of the Welsh and British public who have become deeply cynical about politics. What is, perhaps, even more important is that we could have used this debate to concentrate on the future of the United Kingdom's steel industry, in the light of recent history and in the context of manufacturing generally. We could have raised a range of issues[Interruption.]

Mr. Deputy Speaker: Order. We must not have these continual sedentary interventions

Martin Caton: A range of issues

Mr. Deputy Speaker: Order. That applies to Members on both sides of the House. I call Mr. Caton.

Martin Caton: I apologise, Mr. Deputy Speaker.
	It is a shame that, instead of discussing those issues, we are discussing an untenable thesis that attempts to shift responsibility for last year's steel closure programme to the Labour Government. That is clearly unfair to the leadership of my party. I guess that that is politics, or at least a sort of politics; but it is a travesty of history, as was demonstrated by my right hon. Friend the Member for Newport, East (Alan Howarth) and my hon. Friend the Member for Blaenau Gwent (Llew Smith). It also does a grave disservice to the steelworkers and their families who were victims of the mismanagement and intransigence of Corus.
	I speak as the representative of some of those whose lives were shattered by the announcement of the closure programme just over a year ago. The Bryngwyn works, in Gorseinon in my constituency, was the smallest target on the hit list of Sir Brian Moffat, chair of Corus; but it employed 127 people, and its closurewhich ended 100 years of steel making in Gorseinonhas had a real impact on the village and the surrounding area.
	Last February and March I spent hours in the Bryngwyn works and in trade union offices in Swansea talking to workers and their representatives, with our local Assembly Member Edwina Hart and with local councillors, trying to put together a strategy that could have saved the plant. The work force came up with proposalspainful ones from their point of view, which would have meant the acceptance of some job losses and the mothballing of one production line to reduce costs and keep the works going until the wheel turned full circle and steel production was more profitablebut those proposals were rejected out of hand by the Corus management.
	I said that I spoke as a representative of those affected by the closure. I also speak as a member of the Select Committee on Welsh Affairs, which engaged in two gruelling evidence sessions with Sir Brian Moffat and members of his management team.

Elfyn Llwyd: I was a member of the Committee too.

Martin Caton: Indeed, and I suspect that the hon. Gentleman will concur with my interpretation of what happened.
	What became clear during those sessionsironically, the first took place on St David's day and the second on the day after May daywas that 6,000 people in Wales and on Teesside would be sacked come hell or high water, and that nothing that government at any level could offer would change the decision. All the things that Corus had moaned about in the preceding monthsthe climate change levy, the comparative values of the pound and the euro, its demand for great rebateswere no longer key factors. Corus had decided that it could not export, and that demand from United Kingdom home markets was inadequate. To improve its stock-market value it wanted to downsize, and to downsize quickly.
	When we asked Corus why it had paid 700 million to shareholders when British Steel merged with Hoogovens, it said that that was to make the merger fairer in terms of the cash that each side brought to the marriage. When we asked why, if it had needed to dispose of cash, it had not invested it in the UK steel industrythis, I think, is relevant to points made by Opposition Members about variations in European rules to allow investment aid, and they may find Sir Brian Moffat's answer instructivewe were told that the last thing the industry needed was more investment. But when I asked what Corus was doing with a laminator process from Bryngwyn after its closure, the management representatives admitted that it was over 30 years old and redundant.
	That is typical of the company's failure to invest to improve quality in plants such as Bryngwyn, but it was only the first in a list of failures that we heard about during our two sessions. We heard of its failure, after the merger, to honour its commitments to maintain the then current configuration of plants, and to maintain and improve market share; its failure to engage and involve its work force and its representatives at any stage and any level when the new strategy was being developed; its failure even to discuss with the Iron and Steel Trades Confederation the possibility of letting a union-led consortium take over Llanwern and bring a new initiative to steel production on the site; and its failure, even at the end, to take seriously an alternative proposed for all the plants involvedpresented by the unions, and backed by the Government and the National Assembly for Walesthat would have involved access to European Union and Government money to help maintain production for at least another year. Corus rejected that proposal, but admitted under questioning in the Select Committee that it had never even costed it.
	The company's overall failure also included a failure to listen to Government and to explore with Government, either at Assembly or at UK level, ways of saving jobs. Even so, under questioning Sir Brian Moffat acknowledged that he had been told by the Prime Minister that the Government would help in any way they could.
	It is just plain wrong to blame the Government for what has happened. Government at various levels is trying to pick up the pieces, as my right hon. Friend the Secretary of State pointed out. I pay tribute to those who have contributed to the 4 million regeneration programme in Gorseinon

Nigel Evans: As the hon. Gentleman will know, Allied Steel and Wire, which employs more than 1,000 people in Wales, is complaining about the climate change levy. What representations will he make to his Chancellor of the Exchequer before the Budget statement about its removal?

Martin Caton: I shall make no such representations. I strongly support the levy. In certain circumstances when industry has specific problemsas was the case with Corusthe Government have reduced it. As Sir Brian Moffat told us, however, the levy was costing 8 million at a time when there was talk of a loss of 1 million a day. It was not a significant factor. At one stage there was an attempt to build it up into a significant factor, and the Conservative party jumped on it, but it was not the major issue.

Mark Tami: I had discussions with the unions at Shotton, which spent weeks preparing alternatives to the proposed job losses. The management of Corus took just five minutes to look at those proposals and reject them out of hand. It was a cruel pretence for Corus to go through the process when it had no intention of giving serious consideration to any of the alternatives. It had made up its mind, despite all the good efforts of unions and Government to find a solution.

Martin Caton: That was exactly the experience we had with Gorseinon, and I am sure that every steel plant facing closure or cuts had the same experience.

Llew Smith: My hon. Friend said that during cross-examination of Sir Brian Moffat he had asked questions about the moneys handed out to shareholders. Did he have an opportunity to raise the subject of the moneys appropriated by Corus from the workers' pension fund, and did he have an opportunity to remind Sir Brian that much of the fund had been built up when the steel industry was in public ownership, and that it had therefore been appropriated from taxpayers?

Martin Caton: We did not focus on that in the Select Committee, but I have often heard my hon. Friend explain what went on. It was an absolute crime, and he is right to focus on it.
	I hope that lessons have been learned from last year's experience. I certainly welcome the investment at Port Talbot mentioned by my hon. Friend the Member for Aberavon. I think, however, that lessons will never be learned from history if we allow it to be distorted. That is one reason why we should reject the Tory-supported Plaid Cymru motion.

Elfyn Llwyd: I shall begin by referring to the fine speech made by my hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price). [Interruption.] The hon. Member for Conwy (Mrs. Williams) laughs, but she was not here to hear it. That is how interested she was.

Betty Williams: On a point of order, Mr. Deputy Speaker. I should like to point out that I was present to hear the speech from the hon. Member for East Carmarthen and Dinefwr (Adam Price).

Mr. Deputy Speaker: That is not a point of order for the Chair.

Elfyn Llwyd: If I have misled the House, I apologise.
	My hon. Friend the Member for East Carmarthen and Dinefwr made a powerful speech. We must remember that it was he who discovered the trail of deceit from Mr. Mittal to No. 10 and back, the various favours and the less than truthful accounts that have been given. It is clear that the interests of one party have been put above those of the UK steel industry. The speech was full of passion, and I congratulate my hon. Friend, and my researcher Alun Shurmer, on their hard work and research.
	The Secretary of State made a rather desperate start to his speech. He wanted to refer to education, health and transport, among other devolved matters. However, by praying in aid such matters so that he would not have to refer to Mittal, he caused us to go around the trees and the woods. We discussed everything. I have a high regard for the right hon. Gentleman, but it was a desperate start.
	The Secretary of State assaulted Plaid Cymru, of course, for raising the issue. Uncharacteristically, he attacked us over our participation in the House. That was interesting. We are here far more often than he is. The latest figures show that all Plaid Cymru Members have voted more often then he has recently, so I object to what he said.
	The Secretary of State may have been a bit peeved to have received the hospital pass. He did not want to deal with the debate, any more than I should like to play against England at Twickenham in a few weeks. The right hon. Gentleman struggled valiantly, and made a valiant effort, but without any real success. He started in a hole and kept on digging: in the end, we lost him altogether.
	A sort of explanation or apology was made for what went ona clever bit of historical revisionism about what Corus did. The Secretary of State made it clear that the ISTC is worth listening to, but that the GMB and other unions are not, because they say things that are not favourable to the Government. That is another classic case of revisionism. The right hon. Gentleman referred to the Soviet Union, where revisionism was big. It may be coming back into fashion with new Labour.
	The point is that Mittal gave money to the Government, and the Prime Minister wrote a letter. When the ISTC gave money to the Government, it had to write a letter. It was a rather desperate attempt to bail out this discredited Government.
	If the Sidex deal represented so much benefit to Britainand I accept that assisting Romania was a laudable objectivewas it right that the British taxpayer had to pay for Romanians to come here and sign the deal? The Prime Minister explained that he wrote the letter because it was already a done deal. Where is the logic in that? Moreover, Romania has open government, and the Romanian Government's website makes clear what the letter said. It was patently obvious to all at the time that Lionel Jospin was in Romania to argue on behalf of the French company. That company has better British credentials than the Romanian firm.
	In any event, it was not a done deal. The Prime Minister misled everyone in that regard. We were told that LNM was a British company, but clearly it was not. The French company was far more British, according to the definition used.
	I listened carefully to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). He dissected what had happened, and referred to the deletion of the word friend from the draft of the original letter. We do not know who did that, although the Today programme said that it was no less a person than Mr. Powell. The hon. Gentleman referred to a speech in the Welsh day debate by the hon. Member for Ribble Valley (Mr. Evans), which mentioned steel in Wales. I did not speak about the matter then, as I knew that this debate was coming, but there was no mention of steel when the Ministers replied to that debate. That shows how deep their conviction was that day.
	The hon. Member for Maldon and East Chelmsford spoke about the Irish Ispat company. He described how it owed millions of pounds to people everywhere, including in these islands. He noted that it sacked 600 workers without a by-your-leave only a fortnight after promising to adhere to a five-year contract. I do not think that the company is a good employer.
	However, the main thrust of the speech from the hon. Member for Maldon and East Chelmsford had to do with the culture of cronyism that pervades the Government. It is obvious to all that the Government keep the door wide open for people with money. That perception grows as day follows night. We need a full and independent inquiry into what happened.
	The right hon. Member for Newport, East (Alan Howarth) tried to show that he and other hon. Members had been active during the Corus debacle. I have no doubt that he was. Who am I to doubt the sincerity of those Members? However, I was a member of the Select Committee on Welsh Affairs when we took evidence. The big question is, where were the Government for the two years before the Corus announcement was made? In that time, it was known that Corus was losing millions of pounds each month. Why did the Government not intervene when something could have been done?
	I well recall one Welsh debate about three and a half years ago when the previous Member of Parliament for Caernarfon stated that Corus was in great difficulty and that we should concentrate on it. In response, Labour Members called him a scaremonger and a whingerthe usual stuff. That was a disappointing response, and nothing was done as a result.
	My point is that it was all very well for the Government to jump in and act when it was too late, but where were they when they could have been doing something effective? They have acted too late, and done too little.
	I also want to correct a factual inaccuracy in the speech of the right hon. Member for Newport, East. Corus joined the European Commission in opposing any action to impose tariffs as a safeguard, but it supported later objectives. The right hon. Gentleman contended that the company had been in the US, arguing for tariffs. I am afraid that that is not correct, according to my information.

Alan Howarth: indicated dissent

Elfyn Llwyd: The right hon. Gentleman shakes his head, but there we are.

Martyn Jones: Will the hon. Gentleman give way?

Elfyn Llwyd: I am sorry, but no. The hon. Gentleman has not taken part in the debate.
	The hon. Member for Blaenau Gwent (Llew Smith) offered his usual bluster. Of course we sympathise with the people who have lost jobs. We do not lay all the blame on the Government, but we do consider that the Government acted too slowly. The hon. Gentleman referred to the unfortunate failure of the ISTC buy-out. There is no argument about the fact that everyone was disappointed about that.
	The hon. Member for Blaenau Gwent as usual referred to Nye Bevan. The subliminal message is that the hon. Gentleman might be as good one day. I rather doubt that.
	The hon. Member for North Tayside (Pete Wishart) looked at the wider issue of political donations, and the mire of political sleaze in Scotland. It is bad down here, and pretty bad up there. We can see that every day, and it is very worrying. The hon. Gentleman was right to say that we should examine business links, which do no person or party any favours. We urgently need full, thorough and public investigations into that matter, and into the general subject of the debate. We must ensure that similar things do not happen in the future.
	The hon. Member for Aberavon (Dr. Francis) referred to the explosion at the Port Talbot plant. All hon. Members sympathise with the families of the bereaved, and with those who were badly injured. The investment of 75 million by Corus is most welcome, but it was an insurance payout. That means that the company did not dig into its reserves, but I hopeand I am sure that the hon. Gentleman does toothat there will be more investment.
	The hon. Member for Aberavon has been in the House a relatively short time, but he has sadly become rather tribal. I counted the number of times that he found fault with everyone, although he made it clear that he thinks that the Labour Government are doing perfectly well. Obviously, the hon. Gentleman has been sucked into the system, which is a shame. I used to think that he was an independent thinker. The hon. Gentleman did not deal with the Mittal affair. He is a clever man, but he had no answers to the questions that have been posed. In the circumstances, it was sensible of him to avoid the matter so assiduously.
	The hon. Member for Aberavon referred to the Prime Minister being opposed to tariffs. When did he start being opposed to tariffs? This week. When is the announcement to be made? Tomorrow. That is not very good stewardship of the economy or the country; it is very poor. It has been known since July of last year that the section 201 application was likely to be processed. This week, of all times, the Prime Minister's website says that he has warnedwarned, my GodPresident Bush.
	The hon. Member for Leominster (Mr. Wiggin), reading from a brown paper envelopeno smear intendedreferred to the agony of redundancy, with which we all sympathise. The hon. Member for Gower (Mr. Caton) made some good points about accepting large donations from industry. He, too, probably believes that it is time to consider the matter dispassionately, not today but in another forum. I sympathise about what happened at Bryngwyn, and I was also on the Welsh Affairs Committee at the time. As he said, when big business makes a payment, it is looking for something. However, he did not ask what Mr. Mittal was looking for. I would ask that question.
	I made the point about the French company being more British than the one that was backed. I also want to refer to Ispat's attempt to purchase the Irish plant. That was disgraceful, and, oddly, in 1995, the Department of Trade and Industry objected to it on the basis that it would be against the interests of British industry. Now, however, it apparently has full support.
	This is our first opportunity to have a full parliamentary debate on this subject. The Prime Minister should rightly be here to reply. He should not have given a hospital pass to the Secretary of State for Wales. The Secretary of State for Transport, Local Government and the Regions had to come here to explain himself. Why cannot the Prime Minister make time to do so? He makes time to go everywhere else in the world.
	One or two questions remained unanswered about the United States tariffs. Mr. Mittal paid 400,000 to put up those tariffs against British steel interests. United Kingdom taxpayers' money was actively being used to undermine UK steel jobs at the same time as Corus was rapidly going down. At the same time, by a happy coincidence, 125,000 was donated to Labour. We remember the Ecclestone affair, the Hindujas, Mr. Mandelson and Mr. Vaz

Mr. Deputy Speaker: Order. The hon. Gentleman must refer correctly to Members of the House.

Elfyn Llwyd: I refer to the hon. Member for Leicester, East (Mr. Vaz) and the right hon. Member for Hartlepool (Mr. Mandelson). The others are not yet Members; no doubt they will be parachuted in when they have paid enough.
	I shall quote from the final sentence of an early-day motion tabled by the Minister for Europe when he was in opposition. It states that the House
	calls on the Prime Minister to instigate an immediate independent inquiry and instruct the Chairman of the Conservative party to open all Party accounts to public scrutiny, so that British voters will at last understand that 'The best government that money can buy' leads to the sleaze and corruption evidenced by these findings.
	That sums up the present position.

Don Touhig: Before the debate began, Plaid Cymru was complaining to the press and others that Wales Office Ministers were being put up to answer the debate today. They did not want my right hon. Friend or me to take part. Apparently, Welsh Ministers are not good enough for the so-called party of Wales.
	The debate has shown that at least Labour Members have a real interest in the future of the steel industry, since they, like me, represent steel workers. It has also shown that the issues that affect steel are common throughout the United Kingdom and the European Union, and that whingeing is no substitute for policiesa fact which, sadly, the nationalists have still not learned.
	We have heard some very good and important contributions, such as that of my right hon. Friend the Member for Newport, East (Alan Howarth), who dealt extremely well with the history of the Government's support and efforts to persuade Corus not to make people redundant. The hon. Member for Twickenham (Dr. Cable) warned us of the dangers of economic nationalism, and he was right to do so. He argued that the Sidex sale to Mittal would not hit British jobs saying that the argument that it would was flimsy, and I agree with him in that respect. He also pointed out the importance of the issue of political donations, and I remind him and the House that the Labour party legislated to make them transparent.
	My hon. Friend the Member for Blaenau Gwent (Llew Smith) asked where the nationalists were when we were trying to defend steelworkers and keep their jobs. We did not see them. We supported the steelworkers all along the line and we certainly supported the attempt by the ISTC union to buy the Llanwern steelworks. I was with my hon. Friend the Member for Blaenau Gwent when we met Sir Brian Moffat of Corus and tried to persuade him to change his mind. He would have none of it. He was determined not to sell the Llanwern steelworks to the ISTC because, as my hon. Friend said, that would increase competition for him. My hon. Friend has a staunch record as a defender of his community, and we have seen that again this evening. The hon. Member for North Tayside (Pete Wishart) also made a contribution.
	My hon. Friend the Member for Aberavon (Dr. Francis) welcomed the Government's stance on steel tariffs and the Americans. I have no doubt that the Government will reinforce their position at every opportunity. He also referred to attempts by the ISTC to buy Llanwern steelworks. He rightly derided as irrelevant the nationalists' attempt to link the donation from Mr. Mittal to the Prime Minister's letter to the Romanian Prime Minister. He spoke about our steel heritage but he also stressed the importance of a modern Wales. He spoke legitimately as a Member representing a steel areaa steel town that has produced steel for the last 100 years.
	The hon. Member for Leominster (Mr. Wiggin)the Tories have formed a new alliancecongratulated Plaid Cymru on securing this debate. He clearly demonstrated that there are close links between the two conservative parties in Wales. My hon. Friend the Member for Gower (Mr. Caton) paid tribute to the efforts made by my hon. Friend the Member for Aberavon following the awful tragedy at Port Talbot steelworks. He also strongly attacked the nationalists and the Tories for their smearstheir trademark throughout. It is a travesty of history to say that the job losses at Corus are the responsibility of this Government. We have done everything possible to prevent those job losses. My hon. Friend the Member for Gower spoke movingly of his efforts and those of his colleague in the Welsh Assembly to try to avoid the closure of the works at Bryngwyn.
	The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said that Corus's difficulties had been known about for years, and asked what the Government were doing. All I can do is refer to his remarks at a meeting of the Select Committee on Welsh Affairs, when he said to Sir Brian Moffat:
	You have already confirmed today and it was in the Western Mail yesterday, that there have been 145 meetings with Ministers and Members of Parliament over the last two years.
	That is what we were doing in the two years before Corus announced the job losses.
	The remarks made by the hon. Members for East Carmarthen and Dinefwr (Adam Price) and for Maldon and East Chelmsford (Mr. Whittingdale) were very similar. The hon. Member for East Carmarthen and Dinefwr said that the Prime Minister had asked the Romanians to sell the Sidex plant to Mr. Mittal. That is not true. He went on to say that this Government had given financial support to Mr. Mittal to buy a steelworks in Kazakhstan. That is not true. He went on to say that there had been a late bid by the French to acquire the Sidex steel plant, but that is not the case. He went on to accuse one of the Prime Minister's staff, Jonathan Powell, of amending a letter, but that is not the case either. For good measure, the hon. Gentleman then decided to impugn the integrity of our ambassador in Romania. That is the level that we have come to expect of the hon. Gentleman's contributions.

Roger Gale: Will the Minister give way?

Don Touhig: No, the hon. Gentleman has only just come into the Chamber.
	The hon. Member for East Carmarthen and Dinefwr went on to insist that there were links between Mr. Mittal's donation to the Labour party and the Prime Minister writing a letter, but the hon. Gentleman then added that the evidence may be circumstantial. He cannot have it both ways. He ended his speech with every clich known to man, save God is love and Please adjust your dress before leaving the cubicle.

Adam Price: Will the Minister give way?

Don Touhig: The hon. Gentleman has had his chance. He left the Chamber part way through the debate, perhaps to give another television interview, and I am having my say now. He had his earlier.
	The hon. Member for Maldon and East Chelmsford congratulated Plaid Cymru on the choice of subject for the debate and said that Conservative Members would join Plaid Cymru Members in the Lobby tonight. That is nothing new. The Tories and the nationalists are always in the same Lobby.
	The hon. Gentleman referred to the letter that the Prime Minister had written to the Prime Minister of Romania. When my right hon. Friend the Secretary of State spoke earlier, he referred to the fact that the Sidex sale was important to economic reform in Romania. In a written answer to a question tabled by the hon. Member for East Carmarthen and Dinefwr, my right hon. Friend the Prime Minister referred to Romania and said:
	Privatisation of its steel industry through the sale of Sidex is an important element in its economic reform which will help to establish a level playing field between EU and Romanian steel producers and should lead to a reduction in levels of state subsidies which disadvantage UK steel producers.[Official Report, 14 February 2002; Vol. 380, c. 612W.]
	That is exactly the same message as we had from Corus more than a year ago.

Roger Gale: Will the Minister give way?

Don Touhig: No, I will not give way. Sit down.
	If there is one thing that has characterised this debate, it is the remarkable similarity between the arguments deployed by the Conservatives and by their partners in Wales, Plaid Cymru. It has been a rerun of last week's debate on Welsh affairs, when we could not insert a cigarette paper between the arguments of the two parties. In Wales, Plaid Cymru Members say that they are socialists, yet night after night they troop through the Lobbies and vote with the Conservatives. They will do that again at 7 pm and they will do it again in the days to come. The Tories and their new partners, the daffodil Tories, are working together against the interests of the people of Wales.
	Indeed, so similar were the contributions of the hon. Members for East Carmarthen and Dinefwr and for Maldon and East Chelmsford that they could go on the stage as a double act. We have had Laurel and Hardy; we have had Morecambe and Wise; now we have smear and innuendothe typical way in which they sought to distort the real truth of this argument.
	The debate has been very instructive. The fact that the Tory party has no understanding of our steel communities is not news to anyonenot to those in Gwent, Clwyd, Teesside, Corby or Lanarkshire. However, what constantly amazes me is the Conservatives' brass neck. These are the friends of Asil Nadir, Jonathan Aitken and Jeffrey Archer. They look more often like a remand centre than a political party, yet they come here to lecture us on standards in public life. The cheek of it! They have no shame. The Labour party and the Labour Government opened up scrutiny of political donations. We do not even know who paid the Conservatives' 1997 election bills, because they have not released that information.
	As for the Welsh nationalists, they are silent as the grave when asked about their attempts to raise funds from foreign backers in the United States. We do not hear much from them about that. Those who thought that devolution might lead to greater maturity on the part of Plaid Cymru have been sadly disappointed, although few Labour Members will be surprised by that.
	What has been surprising, however, is the complete lack of thought in Plaid Cymru's arguments in this debate. It tells us that it wants a Wales in Europe; that has been its whole theme. Until now, Britain has not existed. It has been the place that nationalists have wanted nothing to do with, but today they have argued against policies needed to strengthen Europe, to encourage trade within Europe and to help the European Union grow.
	Plaid Cymru Members tell us that they want strong regional policies and structural funding in Europe, but apparently that must not apply to parts of Europe that are not called Wales. That point again emphasises their narrow, nationalist approach. They go on, as they did earlier, about their concerns about tariffs. We have concerns about tariffs, but Labour Members in the European Parliament are not arguing with their colleagues in support of tariffs. One cannot have it both ways. One is either for or against tariffs, but the nationalists clearly do not know what they are for and what they are against.
	The nationalists did not stop to think about the issue that they were raising today. Like children going into a sweet shop, they thought that they had a good story with which they could knock the Government. They immediately sought to exploit it during the Ogmore by-election, but did that work? No, it did not, because a Labour Memberwe wonnow represents Ogmore in this Chamber.
	At the heart of this argument is a letter sent by the Prime Minister to the Prime Minister of Romania. My right hon. Friend the Secretary of State has already referred to it, and it is not a secret that the Prime Minister wrote to the Prime Minister of Romania. I have the letter here that was published on 25 July last year by the Romanians at the signing ceremony. However, the Hercule Poirot of Plaid Cymru, the hon. Member for East Carmarthen and Dinefwr, now gives the impression, supported by the hon. Member for Meirionnydd Nant Conwy, that they have just discovered it.
	The hon. Member for East Carmarthen and Dinefwr then sought to link the letter that the Prime Minister sent to a donation that Mr. Mittal made to the Labour party, but that donation has been known about since May and June of last year. It is not yet another great Hercule Poirot discovery, but just a sham. Both the letter and the donation have been in the public arena for eight or nine months.
	As to the impact of the Prime Minister's letter to the Romanians, I refer to a comment made by the Prime Minister of Romania on 11 February when he was asked about articles in the British press that referred to our Prime Minister's letter. The Romanian Prime Minister said:
	I would like to make it very clear. A privatisation like the one at SIDEX cannot be done on the basis of a letter, irrespective of from whom it would come. Secondly, the letter came at a moment when, after months, the examination and evaluation process had been completed and a decision had been taken.
	He said that the letter came as his Government were preparing to sign the contract. That is the truth of it; there is no link whatever.
	After months of unending bad news, weak leadership and three electoral trashings in eight months, Plaid Cymru thought that it had a stick with which to beat the Government, but it has got it wrong yet again. We know the rotten nature of its policies. They are like so many decaying teeth; they are falling out in front of it.
	At the end of the debate, Plaid Cymru will still have a second-rate leader and third-rate policies. As has been shown in the debate, the party is governed by narrow bigotry, a little Wales-ism and a hatred of anything that succeeds. It does not even qualify for a fifth-rate political party tag. Bankrupt of real policies, badly led, riven with divisions and afraid to tackle the language of extremists, this rag-bag bunch masquerading as a political party have failed Wales today. I invite my hon. Friends to come into the Lobbies with me and deliver it a resounding defeat in the vote.

Question put, That the original words stand part of the Question:
	The House divided: Ayes 192, Noes 318.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):
	The House divided: Ayes 306, Noes 181.

Question accordingly agreed to.
	Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House recognises the fundamental strengths of the British steel industry, which is amongst the most efficient in the world; believes that, despite the regrettable decision of Corus to cut UK steel capacity, the industry has a long term future in Britain, as recently demonstrated by the decision of Corus to invest in the Port Talbot works; further recognises that the success of economic restructuring in Central and Eastern Europe, together with the enlargement of the European Union, is essential for the future of the British steel industry and other British manufacturing as it will extend markets and reduce hidden subsidies; congratulates the European Bank for Reconstruction and Development for its work on restructuring the Romanian and other Eastern European companies, including through supporting the successful sale of the SIDEX steel corporation; and further welcomes measures put in place by the Government and the National Assembly for Wales to train and retrain former steel workers and regenerate communities affected by Corus job losses.

Patrick McLoughlin: On a point of order, Mr. Deputy Speaker. Have you had any indication from the Secretary of State for Health that he intends to make a statement to the House this evening, possibly at 10 pm, on the suspension of a civil servant in his Department? It apparently arises from the failure of the Department of Health to answer a number of parliamentary questions. As those were parliamentary questions, Parliament has a right to hear about the matter, rather than learning about it from the media. Hon. Members have not been properly notified; we should not hear about the matter on the news. The Secretary of State should make a statement in the House.

Mr. Deputy Speaker: I am not aware of the matter to which the hon. Gentleman refers, but he has made the point that he wanted to make. I have no knowledge of a statement being requested.

Nicholas Soames: Further to that point of order, Mr. Deputy Speaker. On a different matter, but connected with a parliamentary question, I seek your guidance in respect of an astonishing answer that I have received tonight from the Under-Secretary of State for Defence. I asked him on 6 February, which is a very long time agothe answer is already a month lateto let me have the latest strength of the Territorial Army by unit and location, as against its establishment.
	I received a reply tonight, which states that the Under-Secretary regrets
	that the strength and establishment of the TA by unit and location is not available.
	Even allowing for the Government's difficulty in assembling factual accuracy, to be polite, is it not astonishing that the answer to a question of such importance can be dealt with in such a way? As I have already waited a month for the answer, may I have your guidance on how it may be possible for us to establish the strength and establishment of the TA, which is, after all, the land defence of the United Kingdom?

Mr. Deputy Speaker: I understand the point that the hon. Gentleman makes, but I have no responsibility for the content of ministerial answers.

Nuclear Power

Mr. Deputy Speaker: I must inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

Alex Salmond: I beg to move,
	That this House notes that planning consents for nuclear and other power stations over 50 MW require consent under section 36 of the Electricity Act 1989, and that in Scotland section 36 powers are the responsibility of Scottish ministers accountable to the Scottish Parliament; further notes the confusion in Government policy on this matter in light of the reported remarks by the Hon Member for Carrick, Cumnock  Doon Valley on Wednesday 27th February, suggesting that Westminster would have the final say over approving nuclear power stations in Scotland; reaffirms that in all circumstances Scottish ministers accountable to the Scottish Parliament should have full planning powers over the siting of nuclear and other new power stations above 50 MW in Scotland; believes that planning decisions on nuclear power in Wales should be taken in accordance with the views of the National Assembly for Wales; and calls for the development of energy strategies in Scotland and Wales which make full use of indigenous energy resources, including gas, clean coal technology, and the enormous potential for renewable supply.
	In the previous debate, my colleagues from Plaid Cymru pressed for clarity on the Government's response to the accusations and information that they were bringing before the House, but clarity came there none. I hope that we have better luck in getting clarity on Government thinking on the development of power stations, especially nuclear power stations, in Scotland.
	For those hon. Members who are not familiar with the story as it has developed over the past week, the chaos and confusion at the heart of the Government became evident in an interview that the Minister of State, Scotland Office gave to the BBC Reporting Scotland programme last week. On the development of energy, especially nuclear power, the hon. Gentleman said:
	Anyone looking at it logically would think it wouldn't be for a legislature which has powers devolved from Westminster to then thwart the policy of a UK Government on areas which are clearly reserved to Westminster, such as energy . . . It would look a wee bit daft if, in reserved areas, decisions were being made north of the border which had a very significant impact south of the border.
	The hon. Gentleman may think that daft, but many Members of the Scottish Parliament and people in Scotland would think it daft to give powers to the Scottish Parliament in 1997, as confirmed by the people in a referendum, only to take them back a few years later.
	The hon. Gentleman set out Government policy but, to be fair, it lasted only 12 hours. The following morning, again on the BBCthe recipient of so much information from the Governmentthe Minister for Industry and Energy responded by saying:
	The position is unambiguous. If anyone wants to build a power station of any kind in Scotland, it will be a matter for the Scottish Executive to determine. End of story.
	We want the Government to clarify their policy. Where is the final decision to be made on the development of new power stations, including, more controversially, of nuclear power stations? Does the power lie with the Scottish Executiveresponsible to the Scottish Parliament, end of story, as the Minister for Industry and Energy saidor does it not behove the Scottish Parliament to thwart the United Kingdom's energy policy, as the Minister of State, Scotland Office said? They cannot both be right. One must represent Government policy.
	We know what is in the Scotland Act 1998. The Minister for Industry and Energy has been specific on the powers. In a letter to my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) and me in November, he made it clear that the powers rightly lie with the Scottish Executive. Incidentally, I know that the letter is important because the Prime Minister's office phoned my office on Thursday to request a copy. I have no idea why the right hon. Gentleman's office did not just ask the Minister. However, the letter confirmed the planning policy guidelines as set out in section 36 of the Electricity Act 1989, under which the power of consent for a power station of more than 50 MW lies with the Scottish Executive, responsible to the Scottish Parliament.
	The power is not narrowly drawn. The guidelines for planning policy set out the criteria against which a decision should be judged. They include the policy of the Scottish Executive and the Government's policy on reserved matters, national planning policy guidelines, European policy, the draft structure or local plan, the environmental impact of a proposal, the design of a proposed development, access, the provision of infrastructure, the planning history of a site, the views of statutory bodies and other consultees, and legitimate public concern or support expressed on the relevant planning matters.
	Until the intervention of the Minister of State, Scotland Office on the BBC last week, it was widely assumed that the power lay with the Scottish Executive. Our suggestion that there might be a reserve grab-back power that the Westminster Government would want to exert over the Scottish Parliament was described by the former First Minister of Scotland, Henry McLeish, in a letter to John Swinney on 23 August as a sensationalist view. He accused the Scottish National party leader of publicising a sensationalist view, but only a few months later the Minister of State, Scotland Office has confirmed what my colleague argued might be at the back of the minds of the Government in London.

Simon Thomas: The hon. Gentleman refers to the accusation that his suggestion was a sensationalist view. Unfortunately, that view has come true in Wales: section 36 agreements were not devolved to Wales. In addition, the Government in London are increasingly attempting to take back the devolved powers that the National Assembly for Wales has over power stations between 1 MW and 50 MW. They are trying that policy out in Wales. It is surely the Government's intention to introduce it in Scotland as well.

Alex Salmond: No doubt my hon. Friend will consider the Welsh position in detail if he catches your eye, Mr. Deputy Speaker. It is worth pointing out, however, that the letter from the Minister for Industry and Energy to my hon. Friend the Member for Meirionnydd Nant Conwy and me also dealt with the Welsh situation. Although it confirmed what my hon. Friend the Member for Ceredigion (Mr. Thomas) says, the Minister for Industry and Energy also said that the views of the Welsh people will be taken into account when any decision is made. We are beginning to wonder whether the views of the Welsh and Scottish people will be listened to, taken into account and then disregarded if they are seen as thwarting Government policy.
	I am interested in the role reversalthe political cross-dressingthat is taking place. The Minister of State, Scotland Office is a lifelong professed devolutionist. He once described himself as an ultra-devolutionista dog of waras he harried the Tory Government in the early 1990s, but he now seems to be adopting the position that Westminster should have reserved powers over such matters. The Minister for Industry and Energy, however, whose record on devolution and the Scottish Parliament is chequered, seems to be emerging as the champion of the Scots Parliament by saying that the powers should reside in Scotlandend of story. What is going on? Have they swapped their positions? Only last week, someone told me that it was like Alice Through the Looking Glass, with the Minister of State, Scotland Office arguing the pure Unionist position and the Minister for Industry and Energy arguing from the Scottish perspective. Stranger things have seldom happened in politics.
	Although the issue is important for energy development in Scotland, especially as nuclear power might be foisted on an unwilling Scottish Executive, Parliament and population, I want to determine whether a theme is developing in the attitude of the Scotland Office to the powers that are being exercised in the Scottish Parliament.

Helen Liddell: The hon. Gentleman talks about nuclear power stations being foisted on the Scottish people. Does he therefore support Bruce Crawford MSP in calling for civil disobedience?

Alex Salmond: I am not familiar with that, but I remember taking part in peaceful civil disobedience against nuclear dumping in Scotland with many members of the Labour party. The right hon. Lady's views may develop on such matters, but mine do not.

Helen Liddell: rose

Alex Salmond: If the Secretary of State can contain herself for a second, I will give way in a moment. No doubt she will take the opportunity to clarify Government thinking on the matter and tell us where the decision will be taken so that Mr. Crawford and others can decide how to react.

Helen Liddell: The hon. Gentleman need not worry: I shall have plenty of opportunities to make those points. Even if he has not heard statements from Mr. Crawford about civil disobedience, will he clarify his own view and tell us whether he supports its use in trying to stop the building of nuclear power stationsyes or no?

Alex Salmond: It depends on the circumstances that might arise. Let me take the point further. Let us imagine the circumstances in which a majority[Interruption.]

Mr. Deputy Speaker: Order. The hon. Gentleman has been asked a question; he must be allowed to reply.

Alex Salmond: I do not think that Labour Members are necessarily going to like the reply. If the Secretary of State can envisage circumstances in which a majority in the Scottish Parliament want it to exercise its powers to stop the building of a nuclear power station, and if we can envisage a position  la gauleiter from Carrick, Cumnock and Doon Valley, the Minister of State, Scotland Office, who wants to impose a Westminster veto on such democratic decisions, many people in Scotland may say that peaceful civil disobedience is appropriate.

Helen Liddell: rose

Alex Salmond: I shall give way to the Secretary of State once more. If I may say so, I should then like to make just a little progress. I do not think there has been any time in politics when the Secretary of State has given way to me three times in a debate, never mind three times consecutively.

Helen Liddell: So the hon. Gentleman confirms that the answer is yes and that he supports civil disobedience.

Alex Salmond: If the right hon. Lady is confirming that she and her Government intend to override a democratic view of the Scottish Parliament[Interruption.] She nods; is she agreeing with the argument that Westminster is going to override that process? She nods again. If that is what is happening, I can assure her that many people in Scotland will think that the sort of response that I have described is appropriate. She will not join us on the barricades, but that is no surprise whatever.

Brian H Donohoe: When will we hear exactly what alternative the Scottish National party proposes?

Alex Salmond: I have just given way three times to the Secretary of State. I hope that the Minister for Industry and Energy, the other hon. Member for Cunninghame, shares his near neighbour's enthusiasm for the rights of the Scottish Parliament. I hope also that I shall be given a chance to develop my speech and that we will hear more about exactly that matter.
	I was asking whether what is happening is part of a pattern or a one-off blunder by the Minister of State. [Hon. Members: It is a pattern.] My colleagues say that it is a pattern in which the Scotland Office is arguing for taking back the powers of the Scottish Parliament and Executive. I think that such a pattern is evident in current issues, such as free personal care[Interruption.] I say to the parliamentary Labour party that that is an important policy for many people in Scotland. It was pursued by the Scottish Parliament, but there was subsequently a dispute with the Department of Health and the then Department of Social Security about the payment of 22 million that was held back. No doubt, the Scottish Executive looked to the Scotland Office for some support and wanted it to advance the argument as the custodian of the Scotland Actafter all, that is what the Secretary of State recently called herself. Instead, it seemed to adopt a policy of arguing in favour of the UK Departments, but against the Scottish Executive and the spirit of devolution.
	The position on Sewel motions is extraordinary. Some 31 such motions have been passed from the Scottish Parliament to Westminster. The SNP agreed with many of them, but last week we saw the procedure that is now being adopted, whereby such a motion goes through the Scots Parliament and is subsequently transformed and amended by this place, but does not go back to the Scots Parliament for confirmation. I think that we can see a pattern developing. People have asked about the role of the Scotland Office in the post-devolution environment. [Interruption.] I think that we are identifying that role nowit is to argue against Scotland and the Scottish Parliament and to thwart the Scottish Executive. [Interruption.] If hon. Members do not agree, they will have to cite examples. On free personal care, Sewel motions, nuclear power stations[Interruption.]

Mr. Deputy Speaker: Order. The House must listen to the hon. Gentleman's speech. Hon. Members cannot constantly intervene from a sedentary position.

Alex Salmond: The sedentary interventions would not get a lot better if Labour Members got to their feet, so I do not think that we should complain too much.
	The second issue that I want to explore relates to the circumstances in which any reasonable Scottish Executive will envisage a configuration of power and energy development in Scotland that is different from what is envisaged in Westminster. We had a good debate in the Scottish Grand Committee a couple of weeks ago

Lembit �pik: Before the hon. Gentleman moves away from nuclear power, does he agree that although it is certainly right for the whole United Kingdom to be involved in decisions about nuclear powera nuclear accident would affect an area of its sizethe crucial point is that the Government should not ride roughshod over the concerns of people in Scotland and Wales? One gets the feeling that there is a significant danger of that happening under the current policy arrangements.

Alex Salmond: There is a significant danger. Perhaps the Minister of State is involved in a much more subtle plan than any of us realise.

George Foulkes: A cunning plan.

Alex Salmond: Yes, perhaps he has a cunning plan and is the Baldrick of Scottish politics. As a lifelong, heartfelt devolutionist, perhaps the only way he could see of raising the issue about the Scottish Parliamentthis point of view has been suggested to mewas to give that apparently careless interview to the BBC last week. Some people think that he was being much more cunning and was merely starting the argument running because he wants the position of Scotland and Wales to be defended. [Interruption.] It is clear that some of his colleagues think that that suggestion is a bit far-fetched, but I still have faith in him, even if they do not.
	I was about to consider circumstances in which any reasonable Scottish Executive might determine that Scotland's energy configuration was different from that south of the border. Currently, if all the power stations in Scotland are running at full strength, we have a capacity of 12,499 MW. The normal running capacity is 9,000 MW and peak demand in Scotland is 5,000 MW. There is currently huge overcapacity in Scotland.
	We have a huge opportunity in relation to two significant developments. In that context, the absence of the Minister for Industry and Energy from this debate is extraordinary, given that he represents half the story. He sat through the previous debate, but is not speaking in this one, despite the fact that his position is interesting and important in relation to it. I understand that he has an alternative diary engagement; obviously, that has not kept the Scotland Office away, although I accept that there can be pressures on the ministerial diary. None the less, he expressed his view that there is huge potential for development of renewable resources in Scotland, and it was backed by the Scottish Executive, which said that the proportion of Scottish electricity capacity provided by renewables could increase from its current level of 10 per cent. to 30 per cent.
	Furthermore, as the Minister of State knows from visiting Peterhead power station in my constituency, we have not only the most efficient combined cycle gas reactor in the world, but 800 MW of spare capacity that cannot currently be used because the connecting lines on the east coast are inadequate for advancing the major opportunity to use gas power that is currently sitting unused. Scotland has under-invested in gas power in comparison with the rest of the United Kingdom and perhaps has more potential in terms of renewables than anywhere in Europe, to echo the comments of the Minister for Industry and Energy. I welcome his initiative and the establishment of the renewables unit; even though there are initially only six jobs, an important signpost for the future has none the less been given in Aberdeen this week.
	Those are all important developments, but no one who considers the situation from a reasonable positionand certainly not the Government's energy policy reviewin terms of a Scottish perspective of renewing the existing stations or establishing new ones after the old ones have reached the end of their economic or technical life could suggest other than that our nuclear option will be controversial, given the significance and prominence of clean technology coal and the potential for expansion of gas power, as well as the huge potential for renewables. I can well foresee

Frank Doran: The hon. Gentleman has been on his feet for 20 minutes, much of which he has spent nitpicking about who said what and on what radio programme. When will he deal with SNP policy? Once a year he gets the opportunity to initiate a major debate in the House of Commons, but he is navel-gazing.

Alex Salmond: The SNP's policy is set out in the motion, which calls for the
	full use of indigenous energy resources, including gas, clean coal technology, and the enormous potential of renewable supply,
	but the amendment on the Order Paper does not clarify the Government's position. The Government say that they have full confidence in the planning processes in Scotland, which the Minister seemed to undermine last week, but they do not tell us what those planning processes are. The SNP approach to these matters is crystal clear: the Government's policy is masked in total confusion. I have dealt with clean coal technology, the potential expansion of gas and the enormous potential of renewable supplies.

Peter Duncan: I am grateful to the hon. Gentleman for allowing me to intervene on this important section of his impressive speech.
	The hon. Gentleman is detailing his concerns about the anticipated decline in nuclear power and saying that he and his party will oppose it here, in the Scottish Parliament and, if necessary, on the picket lines outside planning offices. How does he plan to replace that power with renewable power, given that the political reality is that SNP activists the length and breadth of Scotland oppose each and every renewable energy proposal that I have come across?

Alex Salmond: The hon. Gentleman is being foolish. He is repeating something that was said in the Scottish Grand Committee. I have looked through some of the cuttings to find out who is supporting wind energy projects in Scotland. In Galloway, as the hon. Gentleman should know, Alasdair Morgan MSP is very much in favour of them. In Fenwick Moor in east Ayrshire, the two local SNP councillors, Katie Hall and Annie Hay, are leading the campaign in favour. Adam Ingram, the MSP for South of Scotland, is supporting the Eaglesham Moor project in that area.
	I came across one MSP who has spoken up against a renewable project in ScotlandJamie McGrigor, the Conservative MSP for Highlands and Islands, who spoke against it in the constituency of my hon. Friend the Member for Moray (Angus Robertson), who, like Margaret Ewing, the former MP, supports it. So the only person of political significance who has actively opposed the development of wind energy is the Conservative MSP for the Highlands. [Interruption.] The hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) says, Not guilty. He is disavowing Mr. McGrigor's activities.
	The hon. Gentleman is right, however, that there is an organisation that opposes wind energy projects the length and breadth of Scotland. During the past year, it has singlehandedly stopped 14 wind energy projects in the south of Scotland, which have been detailed by Alasdair Morgan, the MSP for Galloway and Upper Nithsdale. The Ministry of Defence, controlled by the Government, has scuppered every one of those projects because it thinks that they are a danger[Interruption.] Conservative Front-Benchers say, Quite right, too. I can see that there is unity there. The MOD thinks that such projects are a danger to low-flying aircraft.
	I am happy to acknowledge that people in every one of the Scottish parties may object to one scheme or another. In the course of my extensive research, I came across a Member of Parliament who stood out against a key development in the electricity infrastructurethe interconnector linking Scotland and Ireland. He conducted that campaign as an Opposition party spokesman against the Conservative Government, continued it even after the late Donald Dewar gave the interconnector planning consent, and revived it when the Scottish Parliament was established, on the basis that he was no longer bound by collective responsibility: that Member is now the Minister of State, Scotland Office.
	The Minister may have thought that he had good reason to oppose the interconnector because there was strong local feeling against it, and that he was doing no more than representing his constituents, but it ill behoves someone who takes that position to start to complain about Mrs. Jones or Mrs. Smith objecting to a wind policy planning application somewhere in Scotland. Before he starts to pick on ordinary people around Scotland, he should look at his own track record of trying to thwart political developments.

John Robertson: Will the hon. Gentleman clarify his response to the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan)? Is he saying that he is totally in favour of all renewables at any time, anywhere in Scotland?

Alex Salmond: I am in favour of the target announced by the Scottish Executive, which is supported by the Minister for Industry and Energy. It should be possible to raise the contribution of renewables from 10 per cent. to 30 per cent. over the next 20 years, albeit that it will be a tough target to meet. It will require investment and infrastructure in the west of Scotland, where many people have huge enthusiasm for renewables projects. Securing the gas expansion that goes with it will require a huge investment in infrastructurenot only electricity lines, but of the gas network on the east coast of Scotland.
	A few days ago the Minister sent me a courteous letter about a matter that I raised in the Scottish Grand Committeeentry charges for the gas system at St. Fergus compared with other landfill terminals such as Bacton. Entry charges south of the border are much lower. The Minister gave me a comprehensive answer in which he says that that is the result not of Government policy, but of the auction system; that the price that is determined in the auction for entry is determined by the capacity in the system. For the past 10 years, the price of entry at St. Fergus has been many times higher than that at southern terminals because capacity has been inadequate. Although St. Fergus is the most economic place for companies to use, they cannot get into the system.

Michael Connarty: Has not the hon. Gentleman kept up with the science? Sheerwater and others now carry out gas cleaning on the field. They do not put it through St. Fergus, but straight into the gas grid, so St. Fergus is no longer the bottleneck that he describes.

Alex Salmond: The hon. Gentleman is not in command of the subject. Expansion is under way at St. Fergus. In the past few days, Marathon announced a 675 km pipeline from the north-east of Scotland to Bacton. The pipeline, which goes an enormous distance at enormous expense, is required because Marathon cannot get through the network at St. Fergus owing to undercapacity in the system.

Frank Doran: If the hon. Gentleman will forgive my saying so, that is nonsense. The gas goes to Bacton so that it can be exported to Europe.

Alex Salmond: The hon. Gentleman may not be familiar with the science. If the system is reinforced on land, gas can be exported anywhere through the gas system. It is not necessary to use an expensive offshore pipeline if the pipeline on land has sufficient capacity to take the gas. That is elementary. The hon. Gentleman is an experienced Member of Parliament for the north-east of Scotland; I suggest that he familiarise himself with the oil and gas industry that he is meant to represent.

Roy Beggs: I am listening with interest to the hon. Gentleman's enthusiasm for renewables. Will he and his party give a commitment to support hydro-generating projects that are at the planning stage in Scotland? Experience has shown that it takes years to reach such decisions, which is damaging employment opportunities in my constituency.

Alex Salmond: For the first time in 40 years there is a new hydro project in Scotland, for which the SNP has expressed support. It will be a test of whether people are prepared to accept the further development of that enormous resource, which was originally developed because of the vision of a group of people after the second world war. The straight answer to the hon. Gentleman is yes, we would.
	So far, I have considered whether there is a pattern of the Scotland Office grabbing back powers from the Scottish Parliament and Executive. We will be interested to find out whether the position that holds is that of the Minister for Industry and Energy or that of the Minister of State, Scotland Office. I have considered Scotland's potential across a range of electricity-generating options, which, by common consent, is enormous.

Michael Connarty: Will the hon. Gentleman give way?

Alex Salmond: I have given way once to the hon. Gentleman; I have given way 10 times in total so farperhaps morewhich is reasonable, so I shall now make some progress. The hon. Gentleman might strike it lucky before the end of my contribution, which is slightly longer than I originally intended.
	We know that the Conservative party has been the only party unambiguously in favour of nuclear power. The Labour party went into the 1997 election with the same policy as that which the SNP and the Liberal Democrats now have: that the current nuclear power stations should be phased out when they reach the end of their technical or economic life. The most recent Labour manifesto made no mention of that policy. No doubt, the policy might emerge as this debate continues, but it has a lot of support in the Scots Parliament, so it is entirely reasonable to suppose that a majority of its Members may well not want to give section 36 permission to develop a new nuclear power station in Scotland.
	That brings us to the crux of the debate. If such a majority exists and the Scottish Parliament and the Executive, who are responsible to it, decide to say no to a new nuclear power station in Scotland, will that decision prevail, as the Minister for Industry and Energy has said; or will there be a reserved power, such as that alluded to by the Minister of State, Scotland Office? The Minister for Industry and Energy said that that decision would prevailend of story. We want the Government to tell us whether they and the Scotland Office share his view; whether they are willing to argue and fight for Scotland and the Scottish Parliament; or whether they want to thwart the democratic will of the Scottish people.

Helen Liddell: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	has confidence in the process of granting planning consent for new nuclear power stations in Scotland and Wales; notes the benefits of addressing issues relating to energy policy within a UK framework; welcomes the contribution of the recent PIU Energy Review to the debate on energy policy; and welcomes the intention of HM Government and the devolved administrations to work in partnership in implementing an energy policy to ensure energy supplies are secure, competitively priced and sustainable.
	The hon. Member for Banff and Buchan (Mr. Salmond) spoke for 32 minutes, and we got to the crux of the issue 31 minutes into his speech, but the Government welcome debate about the future energy needs of our country. We are addressing those issues, as any responsible Government should, and we are in the midst of a fundamental review of energy needs. That is why the Cabinet Office has recently published the performance and innovation unit's energy review, why we will consult on it and why we are planning to publish a White Paper later this year.
	Energy needs mustI repeat, mustbe looked at in a United Kingdom context, in the interests of all our people and of the entire United Kingdom economy and environment. It has taken a visionary Labour Government to see the need to look 50 years into the future and assess what the United Kingdom-wide demand for energy throughout that period will be and how it might best be met. It has taken a visionary Labour Government to develop a strategy that ensures current policy commitments are consistent with longer-term goals.
	Ensuring security of supply, tackling climate change and maintaining low prices are key issues. However, tonight's debate is not about the vital issue of energy but about the Scottish National party's distorted priorities. Its motion is based on the false assumption that the Government have a master plan to build more nuclear power plants and are determined to foist them on an unwilling Scotland. Nothing could be further from the truth. There are no such proposals. The Government have looked at all the options for energy supply for the next half a century and refused to rule anything out.

Alex Salmond: Last week, the Minister for Industry and Energy said:
	The position is unambiguous. If anyone wants to build a power station of any kind in Scotland, it will be a matter for the Scottish Executive to determine. End of story.
	Does the Secretary of State support that position?

Helen Liddell: I urge the hon. Gentleman to be patient. I will get to that point, and to a number of other issues that he raised. I suggest that he relax and hauds his wheesht for a wee while longer. This Government will keep open all our energy options so that we can do what is in the best interests of the people of the United Kingdom.

Alex Salmond: If we cannot find out whether the Secretary of State supports the position of the Minister for Industry and Energy, will she say whether she supports that of her own Minister of State, who said that reserved area decisions made north of the border should not have a significant impact south of the border?

Helen Liddell: Again, the hon. Gentleman should be patient. He is wasting more time, having called an unnecessary vote at 7.15 pm to delay the start of this debate, spoken for 32 minutes without saying anything and sought to delay the progress of the debate. What is he frightened about? I will come to what my hon. Friends said on BBC radio, but his motion raises several other issues, and I intend to take them into account as well.
	I shall now return to the fundamental assumption behind the PIU energy review: the need for a balanced energy policy. That is essential not just for our continued economic strength, but for our strategic security. The specific and very narrow issue that the SNP wants to discuss tonight is hypothetical and light-years away from the priorities of the Scottish people. The SNP has used its one chance in the year to have the Floor of the House to discuss not how we can advance Scotland's competitiveness or secure an environmentally balanced energy policy, but how planning consents work and who says what whenand even that is based on a false premise.

Frank Doran: Is my right hon. Friend surprised that the leader of the Scottish National party has taken that view? He is sitting next to the man whom his party seems to be spending so much time promoting as the hardest working Member of Parliament, and next to him is the sleaze-buster general, who seems to be making it his job to root out sleaze wherever he finds it. None of them has a policy of any interest to the Scottish people.

Helen Liddell: I could not agree more with my hon. Friend. Indeed, I shall deal with those points later. The people of Scotland want to know how we can secure for our children a place at the centre of the knowledge economy, with a robust and competitive economic environment, but the SNP wants to talk about a mythical company producing a proposal at some point in the distant future to build a nuclear power station that the Scottish Executive then reject on planning grounds. So what? That is their right. Planning is devolved, and the fact that executive devolution was granted to the Scottish Executive by the Government in relation to the Electricity Act 1989 as well is a sign of the close partnership between the Government and the Scottish Executive. I did not hear the hon. Member for Banff and Buchan refer to that Act during his speech; he obviously did not get round to that in his research.

Alex Salmond: Will the Secretary of State give way?

Helen Liddell: I shall give way to the hon. Gentleman for the third time.

Alex Salmond: Section 36 of the Electricity Act 1989 is part of what we are debating. The right hon. Lady seems to be saying that that power lies with the Scottish Executive, who are responsible to the Scottish Parliament. Is that the end of the story? If so, what on earth was the Minister of State talking about last week, when he said that the policy in Scotland should not
	thwart the policy of a UK Government?
	Who will take the final decisionWestminster or the Scottish Parliament?

Helen Liddell: I know that the hon. Gentleman likes the sound of his own voice, but if he will keep quiet a little longer, he will be told the definitive position.
	The SNP always sees these issues in terms of confrontation, tension and failure. Its argument, like that of the hon. Gentleman, is ill informed and has been inadequately researched. It falters precisely because of the partnership that exists between the Scottish Executive and the Government. I have no doubt that the SNP wishes that there were no such partnership. Its only hope of carving out a future for its separatist ambitions is to seek to foster such conflict. It is out of touch and out of tune with the growth of a modern Scotland.

Annabelle Ewing: Will the right hon. Lady give way?

Helen Liddell: No, I am going to make some progress. The hon. Lady may be lucky in catching the eye of the Deputy Speaker later.
	Let me explain the position, as set out in the Scotland Act 1998, on planning consents in general, not just for nuclear power stations. Planning law is devolved. It is clear that the intention behind the Scotland Act was that the Scottish Parliament would have legislative competence for the planning regime in general, and that would include its application to airports and nuclear power stations, just as much as it has competence for the planning regime for any other type of development.
	Nuclear energy, however, is reserved by dint of section D4 of part II of schedule 5 to the Scotland Act. The provisions of schedule 4 also make it plain that the Scottish Parliament has legislative competence for planning in reserved areas to maintain consistency of approach throughout devolved and reserved areas. That deals with the point that we are discussing tonight.
	I ask the hon. Member for Banff and Buchan to listen carefully to my next point because it concerns the area that he did not see fit to research. Scotland Office Ministers have been involved in discussions on two recent policy reviews in which consent procedures for major projects have come up: the performance and innovation unit energy review and the Department for Transport, Local Government and the Regions Green Paper on new procedures for dealing with major infrastructure projects of national importance.
	In both instances, the Scottish Executive were involved in consultations with the PIU and the DTLR. Both reviews drew attention to the UK dimension of some major infrastructure projects. One such dimension is the extent to which reserved law continues to apply to the development of such major projectslaw that is a matter for this Parliament, and law that this Parliament must make with regard not just to England and Wales but to Scotland.
	For example, some of the infrastructure projects referred to in annexe C of the DTLR consultation paper require separate authorisations under specific legislation relevant to those developments, quite apart from planning development permissions. In particular, the construction of power stations or overhead power lines needs authorisation under part I of the Electricity Act, as well as needing planning permission. There are similar specific authorisation procedures for pipeline developments.
	That means that both Parliaments may have legislative competence to make law relating to controls governing such infrastructure developments. But there are other ways in which UK responsibility may apply. In the context of energy developments such as power stations, it remains the responsibility of the Government and of this Parliament to ensure that there are sustainable and secure supplies of energy for industry and for domestic consumers throughout the UK. We have to have regard to this country's need for energy supplies.

Tam Dalyell: Will the Secretary of State take into account the forecasts that after 10 years we may have to depend on Soviet and middle east supplies for up to 70 or 90 per cent. of our needs? In light of her remark about secure supplies, that is a daunting prospect. Can some of us be forgiven for being in favour of Hunterston C as well as new nuclear power stations at Sizewell and, probably, at Hinkley?

Helen Liddell: My hon. Friend makes an important point. That is a daunting prospect. The motion in the name of the hon. Member for Banff and Buchan commits the SNP only to the use of indigenous energy supplies. One of the jobs of the Energy Minister is to keep the lights on; SNP policy would not get anywhere near that.

Robert Smith: Does the right hon. Lady recognise that the prospect may not be as daunting as it first seems? First, the premise of the energy review was an over-pessimistic view of the growth in energy demand that is not matched by any previous projections. Secondly, the forecasts underestimate the potential for the North sea to continue to provide the country with considerable gas reserves. Finally, we must recognise that the European Union is supplied from many diverse gas sources.

Helen Liddell: If the hon. Gentleman will forgive me, I will not be diverted down that route. We discussed that in the Scottish Grand Committee, and a consultation exercise will follow the PIU report. The successor to the oil and gas industry taskforce looked at all those issues, and they are not as clear-cut as the hon. Gentleman suggests.

Alex Salmond: Will the right hon. Lady give way?

Helen Liddell: No, I want to make progress.
	I turn now to other issues raised by the motion. It states that the Minister of State, Scotland Office is reported in the press as saying:
	Westminster would have the final say over approving nuclear power stations in Scotland.
	Let me be absolutely clear: he said no such thing. I have the transcript here in front of me. In his interview with the BBC, my hon. Friend said:
	the decision might ultimately rest with the Westminster Government.
	He went on to say:
	I think it is very important to establish the position absolutely clearly at an early stage so that we know who has the ultimate responsibility.
	That is the statement of a sensible Minister addressing significant issues.
	Naturally, as always, the SNP wants to turn this debate from a matter of common sense into a constitutional wrangle. It sees conspiracy in everything because, as it emphasised again this weekend, it lacks vision and, indeed, the commitment to devolution that allows mature reflection on issues that require further analysis. SNP Members need to learn to leave their paranoia in the cloakroom if they wish to be taken seriously.
	What is more, the United Kingdom has international treaty obligations on energy and the environment, and as a responsible Government, working with a responsible Scottish Executive, we need to ensure that we do not build in obstacles to meeting those obligations, which are not devolved. These are complex matters requiring mature consideration. Responsible Ministers have to seek clarity in these complex areas before specific issues arise. There must be no question of the United Kingdom being restricted in meeting our international obligations, for example, in relation to Kyoto and the liberalisation of European energy markets.
	As part of the DTLR review, we must be prepared to look at all the issues that are raised. That is what makes us a competent Government, and indeed a Government committed to ensuring that the devolution settlement workssomething that the SNP is fundamentally opposed to. That is exactly the position to which my hon. Friend the Minister of State was alluding. He made it explicitly clear that Scottish Ministers have full planning powers on the siting of nuclear and other power stations. As an experienced and senior Minister, he made it clear that there are broader issues that it would be remiss of the Government to ignore.
	I am conscious that the motion refers to Wales as well as Scotland, and I turn now to Wales, although I do not profess to have great expertise on Welsh planning matters.

Alan Reid: Before she turns to Wales, will the right hon. Lady answer a simple question? If a planning application for a nuclear power station in Scotland were submitted, who would have the final say over whether it should be builta Scottish Minister or a UK Minister?

Helen Liddell: The hon. Gentleman plainly has not listened to what I have said. Planning consents are devolved to the Scottish Parliament. Areas of executive devolution under the Electricity Act 1989 have been passed to the Scottish Executive. However, legislative responsibility for nuclear energy rests with Westminster.
	Existing procedures for certain projects in Wales are a matter for the National Assembly. They involve a planning decision committee receiving an inspector's report following a public inquiry. The report brings together the relevant issues, including environmental concerns, and an environmental statement produced by the developer where necessary to meet environmental impact assessment requirements.
	Cross-border infrastructure projects involving Wales are normally the subject of an application under the Transport and Works Act 1992. Decisions are normally taken by Secretary of State for Transport, Local Government and the Regions, and the Assembly must approve a draft order before a final order confirming a project can be made.
	Planning responsibilities for major projects, such as power stations over 50 MW, are reserved to the United Kingdom Government and are not subject to the Transport and Works Act. Planning procedures for major projects are, of course, subject to the current DTLR consultation exercise, and I am sure that the National Assembly will make its views known to my colleagues at the DTLR.

Roger Williams: The Secretary of State has addressed Wales, but, for example, the Cefn Croes application for a large wind farm in Ceredigion was determined by a Minister at the Department of Trade and Industry. The Minister had the option of holding a public inquiry and there was considerable concern in Wales about the effect of the proposal on the landscape. He decided not to do that and issued permission. Should not the Government respond to the views of the people of Wales and hold public inquiries for contentious applications of that sort?

Helen Liddell: The hon. Gentleman may ask for that, and I shall undertake to ensure that my right hon. Friend the Secretary of State for Wales replies to him.
	Let me return to the motion and examine energy policy. The whole House should thank the SNP for the information that we can glean from the motion. It provides rather more information about SNP energy policy than has hitherto existed. We can contrast its approach with the Government's approach to energy policy, which has been thoughtful, considered and mature. The SNP has nothing more to say about its energy policy than that it is an avowedly anti-nuclear party. Its decision to depend only on indigenous sources of supply puts in jeopardy the certainty of energy supplies.
	The motion fails to take account of the maturity of the North sea and the certainty that we will soon be dependent on imports of gas. There is only one deep mine in Scotland, and it is experiencing geological difficulties. The SNP pays lip service to renewables, but in virtually every constituency where renewables issues arise, SNP activists campaign against them. My right hon. Friend the Minister of State pointed out at the Scottish Grand Committee that the proposal for Dailly in his own constituency is opposed by SNP activists on the not in my backyard principle once so loved by the Tories. The SNP's position is illogical, ill thought out and incompetent.
	The new SNP leader John Swinney has said that he would
	not approve plans for any new nuclear power stations in Scotlandnot now, not ever.
	Tonight, we have heard the hon. Member for Banff and Buchan admit that he would be prepared to use civil disobedience to stop nuclear power stations being built. The SNP is gambling with the energy needs of Scotland.

John MacDougall: Does my right hon. Friend share my concern about the programme proposed in the SNP's indigenous resource strategy? I recently received a letter from the chief executive of Shell regarding the petrochemical plant at Mossmorran. Does my right hon. Friend agree with the chief executive that such a policy, and the loss of access to the rich Norwegian gas fields, would have a catastrophic impact on Mossmorran? Is not that another example of the loss of jobs that would result from an ill-considered policy?

Helen Liddell: My hon. Friend is correct and raises an issue of real concern to real people about real issues of policy. The SNP will long live to regret the sloppy drafting of the motion. SNP energy policy is a leap in the dark. Last weekend, it launched its Talking Independence campaign, and I wonder what its friends in Plaid Cymru have to say about that. We are told that SNP members will take presentations round the boardrooms of Scotland to persuade Scottish industry that its separatist policies will work.
	Let us ignore for a moment the questions that the SNP will have to answer about how uncertainty, high taxation, insularity in the global marketplace and increased expenditure on defence, foreign embassies and re-fighting the cod war could possibly be good for Scottish business. Let us consider instead how its energy policy would radically hamper Scotland's competitiveness. While the rest of Europe seeks liberalised energy markets and the lower energy prices that would result from that, the SNP would take us back to tallow candles and gas lights.

Alex Salmond: Will the right hon. Lady give way?

Helen Liddell: No.
	Today's debate has exposed SNP energy and economic policy for the sham that it is. Rather than widen options for Scottish business, the SNP wants to narrow them. Rather than looking outward to seize the opportunities of energy liberalisation throughout Europe, the SNP wants to retrench, isolating the energy industry in Scotland, threatening security of supply, endangering the low energy prices enjoyed in this country and narrowing the range of energy suppliers available.
	The SNP's energy policy is alsosurprise, surpriseuncosted. The SNP has failed to spell out how it would pay for its policy on Dounreay and on the decommissioning of other nuclear facilities in Scotland if it were to lead Scotland to separation. In spite of the pledge in its 2001 manifesto that Dounreay would be
	supported as an international centre of decommissioning
	the SNP has not explained where the money would come from to cover the multi-billion pound price tag that UK taxpayers are currently picking up.
	In a separate Scotland, the SNP would not only have to take on decommissioning costs for Dounreay, but pay for the closure and clean-up of other facilities at Rosyth and Faslane. Neither has the SNP given us the bottom line on unemployment. Not once have SNP Members talked about the consequences of their policies for ordinary people. They prefer to avoid concentrating on issues concerning the real people of Scotland, and revert, as the hon. Member for Banff and Buchan is proving as I speak, to the school debating chamber.
	The SNP has blown this opportunity to try to play a constructive part in building a modern Scotland. It has set out for all to see the poverty of its ideas, the shallowness of its policies and its outdated obsession with constitutional wrangling. It is easy to see why the SNP was rejected by the people of Scotland. It will continue to languish on the fringes of the body politic.
	The Government's amendment recognises the strength of the partnership between the Government and the Scottish Executivea partnership endorsed by the people of Scotland and one that is making devolution work. I commend the Government's amendment to the House. 8.29 pm

Jacqui Lait: When I was first appointed as shadow Secretary of State for Scotland, a Labour Member, after a Westminster Hall debate, said, Welcome back to the bearpit of Scottish politics. I have to say that listening to what has gone on this evening reminds me more of a family quarrel, because most family quarrels are characterised by long-standing lines of argument that everyone knows, everyone has heard before, and everyone thoroughly enjoys, even though no one outside has the first clue what they are about. That certainly characterised the exchanges that we have just heard.
	I congratulate the Scottish National party on securing this debate, although I slightly agree with the Secretary of State that it is a great shame that its annual outing should come down to the equivalent of a spat between two Ministers. I congratulate the SNP none the less. We were told that the terms of the debate were set in such a way that the Conservatives would be able to support them. Some hon. Members may have noticed the absence of the word nuclear from the motion, yet the first subject to be brought up was nuclear power, followed swiftly by an admission from the hon. Member for Banff and Buchan (Mr. Salmond) that he believed in civil disobedience. I cannot think of a quicker way of ensuring that the Conservatives would be unlikely to support the motion.

Alex Salmond: I am puzzled as to why the hon. Lady thinks that this subject is not of sufficient importance. Only last Thursday, the sole Conservative Member of Parliament representing a Scottish constituency described this as a developing crisis at the heart of government. Was it a developing crisis last Thursday? Is it still a developing crisis? Has the hon. Lady changed her mind? She cannot disagree with her only Scottish representative.

Jacqui Lait: If the hon. Gentleman had possessed his soul in a little more patience, he would have recognised that I was going on to say, having listened carefully to the Secretary of State's explanation of the situation, that it raised more questions in my mind than the original alleged disagreement between the two Ministers. That is what I would like to explore tonight.
	If I understand the right hon. Lady correctly, I do not think that there is any disagreement that section 36 of the Electricity Act 1989 is devolved, and that the Scottish Executive would have the authority under the current planning structure to make a decision on a nuclear power station entirely on planning grounds.

Helen Liddell: There is a fundamental misunderstanding at the heart of what the hon. Lady is saying. The section 36 power is executive devolution; power to legislate remains with this Parliament.

Jacqui Lait: Yes, I accept that entirely. I am glad to have had clarification on the matter. I do not want this speech to turn into a dialogue, but it may well do so, because I am trying to extract the precise details of the situation.
	As I understand it, under executive devolution, the Scottish Executive would have the powerentirely on planning grounds and no othersto agree or disagree on a new nuclear power station. If that is soI accept the Secretary of State's point about the other part of the Electricity Act stating that the DTI would also have responsibility for related consentsand the UK Government had a strategic need for a new nuclear power station in Scotland, given that it would be a good thing for the Scottish Economy and the Scottish energy production industry to renew its nuclear power stations, and if the Scottish Executive were to turn down the consent for such a power station entirely on planning grounds, would there then be a continuing stream of applications from British Energy or any other company that wished to build a nuclear power station, based on the UK Government's strategic need for a nuclear power station in Scotland, or would Westminster insist on overriding the Scottish Executive?

Helen Liddell: I have heard of polyparenthetical sentences, but that one should probably take its place in The Guinness Book of Records. The point to which the hon. Lady is referring is the very point that my hon. Friend, the Minister of State, Scotland Office, raised. There are issues, particularly in relation to large infrastructure projects, which are the subject of discussion at the moment.

Jacqui Lait: Right. Discussionsconsultation exercises, whateverare going on at this very moment between a Labour Government and a Labour-led Scottish Executive. What would happen if different political parties were running the UK Government and the Scottish Parliament? If there were a fundamental disagreement in those circumstances, which Government would take precedence? My understanding of what the Secretary of State has said is that, when push comes to shove, the UK Government would make the overriding decision. If that is the case, the fears expressed by the Scottish National party have some substance, because the final decision-making power right at the end of the system would rest with the UK Government.
	Schedule 9 of the Scotland Act 1998 implies that there is a legal recourse only if Scottish Executive Ministers exceed their powers. There would be no legal recourse if the UK Government Ministers exceeded their powers. This brings into play the new planning review and the role of the UK Government in deciding on planning issues through the House of Commons. The statutory instrument procedure, which appears to be the procedure referred to in the consultation document, takes an hour and a half, as we all know. If the planning procedure comes into effect, how would it affect strategic decisions in relation to the Scottish Executive? It seems to me that it would override the Scottish Executive's planning powers under the Scotland Act 1988 and the executive devolution of the Electricity Act 1989.
	I come inescapably to the conclusion that, however friendly the current UK Government are with the current Scottish Executive, should there ever be a conflict between the two Governmentswe look forward to that happening sooner rather than laterthere would be no legal recourse to a solution to such a conflict. That is precisely the point that came out of the debate between the Minister of State, Scotland Office and the Minister for Industry and Energy. That is why this debate is crucial; it goes way beyond the triviality of the motion tabled by the SNP and straight to the heart of the devolution settlement.

Helen Liddell: I am grateful to the hon. Lady for giving way again, and I shall certainly not seek to interrupt her further. The best way that I can answer her point is to quote my hon. Friend the Minister of State, Scotland Office in a recent BBC interview, which has been the subject of discussion this evening. He said:
	Well this is why we have to look at it to make sure that it is absolutely clear now in the context, not of a specific application but in the general context of public policy, important to determine what the position is.
	His syntax was not terribly good.
	Because if it came up in the context of a specific application then clearly other factors would be brought in to bear and wouldn't necessarily be considered in an objective way. I think it is very important to establish the position absolutely clearly at an early stage so that we know who had the ultimate responsibility, and that obviously has to take account of the responsibility of Westminster for reserved areas.
	It is specifically that that my hon. Friend seeks to clear up.

Jacqui Lait: That is as clear as mud. The right hon. Lady is wriggling on the reality that Westminster retains control over the final decision on new nuclear power stations in Scotland. It is useful to have that clarification. It will be fascinating to see how the Government's consultation develops and what the reaction will be not just in the Scottish Executive but throughout the Scottish Parliament.
	Scottish Executive Ministers could be overridden unless they set up a planning procedure similar to the one that the Government are suggesting for England and Wales, in which case there may be even more confrontation. The Government have yet again dodged some of the issues raised during the passage of the Scotland Bill in this House when we pointed out its inherent difficulties.
	It will be interesting if the right hon. Lady does as it is rumoured she will and seeks to amend the Scotland Act with regard to the number of MSPs. That will require primary legislation, which might be a good opportunity to consider the responsibilities of the UK Government with regard to overriding the Scottish Executive on planning issues such as those relating to nuclear power stations.
	I too want briefly to refer to Wales. Like the Secretary of State, I do not for a moment profess to any specific expertise in this area, but I want to draw her attention to the way in which, as far as we can make out, the Government overrode and took no account of the views of the National Assembly for Wales on wind farms. I simply ask whether that would be the approach to any nuclear power consents in Wales? Would the Minister for Industry and Energy override and ignore the National Assembly for Wales?

Simon Thomas: I believe that the wind farm to which the hon. Lady referred is Cefn Croes in my constituency, which was approved by the Department of Trade and Industry without reference to a public inquiry. I should say on the record that I supported that wind farm, but I felt strongly that there should be a public inquiry. The hon. Lady is right that that is a poor precedent for what might happen in terms of nuclear power development. I understand that the Conservative party supports nuclear power, but does the hon. Lady agree that it is vital that the people of Wales should decide what and where any such new energy development should be in Wales?

Jacqui Lait: That is a point with which I could only agree. It is crucial that the voice of local people and the National Assembly for Wales is heard. I do not wish to become directly involved in a constituency issue of the hon. Gentleman's, but as I understand it no account whatever was taken of the views of local people on Cefn Croes and, if that is so, apart from anything else, that overrides the basic planning approvals, and probably all hon. Members would agree that that is not the best way to proceed.
	Conservatives, as many have already said, want to see balanced energy provision. Scotland produces 50 per cent. of its energy from nuclear power and exports 25 per cent. of its total production to other parts of the UK, so bringing income into Scotland. But Dounreay and Hunterston A are being decommissioned, Chapelcross is due for decommissioning in 2008, Hunterston B in 2011, and Torness not until 2023. As I understand it, there is no way that the Government's ambitious hopes for renewable energy could meet the gap if all those power stations were decommissioned.
	Therefore, there is a need to ensure continuity of supply, particularlythe point made by the hon. Member for Linlithgow (Mr. Dalyell)given our increasing reliance on imported gas, the price of which is increasing on the continent, which will inevitably mean a price increase in the UK sooner rather than later .
	We welcome the initiatives and commitments by Scottish Power and British Energy to renewables, but we also welcome British Energy's recent agreements to look at the potential for new nuclear power plants. It would seem sensiblethis is the point that my MSP colleagues made to the PIU reviewfor nuclear power plants in Scotland to be sited at Hunterston and Torness where there is already an understanding of the benefits of nuclear power and where the infrastructure is in place. That may save the Secretary of State's bacon because there may be more understanding of nuclear power issues in areas where nuclear power stations already exist.

Russell Brown: The hon. Lady mentioned Hunterston and Torness, but what about Chapelcross?

Jacqui Lait: Chapelcross will be decommissioned in 2008. If British Energy and Scottish Power want to make a planning application for Chapelcross, that is their commercial decision. That is the basis on which I would want matters to proceed; I would not want Government interference.

Alex Salmond: What is the position of the hon. Lady's party on the development of further combined cycle gas stations in Scotland? Only 15 per cent. of our capacity derives from combined cycle gas, butaccording to the Government's own energy review figuresit costs a quarter as much as nuclear power. Does the hon. Lady think that its use should be extended?

Jacqui Lait: I hope that the hon. Gentleman heard me say that we believe in a balanced energy policy. If the private sector believes that that is the way forward and commercial reasons exist for pursuing it, the private sector should put forward proposals on ensuring the provision of sufficient energy at a reasonable price.

Alex Salmond: Is the hon. Lady saying that she is content to let the market decide? Will the market control people's choice of gas or nuclear power, or does she envisage an ongoing Government subsidy for nuclear power?

Jacqui Lait: The problem is that the hon. Gentleman's argument is based on a very left-wing political stance that does not understand the market and the need to meet its requirements. [Interruption.] I do not want to get involved in a dialogue on this issue, but one must take account of the fact that science moves on. Some interesting developments are taking place in the provision of nuclear power and/or other forms of energy, which will transform the economics of power provision in the coming years.
	We need to break free from parallel lines of thinkingwhereby only one form of nuclear power provision existsand develop new forms. We must look to those who are dedicated to providing decent energy for the UK at the lowest possible cost to offer suggestions on how to develop power provision. That is what we Conservatives support. Labour Members' support for privatisation and references to the market provision of energy is a major change in Labour's energy policy that we can only welcome. I want Scotland to continue to develop and produce energy, but I am concerned that the SNP's policy would limit Scotland's opportunities rather than enhance them.

Bill Tynan: I welcome the opportunity to participate in this vital debate on energy. A constructive debate is necessary, and it is a shame that our discussion has so far been based not on future energy requirements but on the SNP's anti-nuclear stance. The performance and innovation unit's report makes it clear that many questions need to be answered, and it is absolutely essential that the consultation process be based on that report. The consultation process should not be restricted by the dogma of a particular party, but should range as widely as possible. We must consider how best to deliver a balanced energy policy, whether in Scotland or in England.
	It is true that, at the moment, Britain is self-sufficient in energy, but that is coming to an end. The fact is that, according to current predictions, we will be a net importer of natural gas within three or four years.
	If our present policy remains unchanged, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, gas will supply 70 per cent. of our electricity needs by 2025, and 90 per cent. of that will come from Russia, north Africa or the middle east. That is why we must seriously consider how we move forward, and recognise the social implications as well as addressing the economic and environmental issues.
	Public consultation on the report must be wide-ranging. It will lead to the publication of a White Paper some time in the autumn, and I hope that the debate on it is comprehensive. Unfortunately, tonight's debate is based on the froth that we have come to expect from the Scottish National party.
	The SNP says that there is an adverse reaction to nuclear energy in this country. Much has been said about Holyrood having the final say, but we could have avoided this debate if SNP Members had spoken to one another. The hon. Member for Angus (Mr. Weir) put a parliamentary question on nuclear reactors, and the reply from the Minister of State, Scotland Office said:
	Consent is required for new power station developments under the Electricity Act 1989. In Scotland, the power to grant consents is a devolved matter and the procedures are the responsibility of Scottish Ministers.

Michael Weir: Can the hon. Gentleman explain how that ties in with what the Secretary of State has just told us about the ultimate responsibility for decisions? She seemed to say that the ultimate responsibility lies in this place, which is at variance with what the hon. Gentleman has just read out.

Bill Tynan: There is a danger that, if we try to perpetuate a lie, people may come to accept that as a truth. The position is quite clear. The reply to the hon. Gentleman from the Minister of State stated clearly that
	the power to grant consents is a devolved matter and the procedures are the responsibility of Scottish Ministers.[Official Report, 6 November 2002; Vol. 374, c. 173W.]
	SNP Members should have spoken to one another.

Alan Reid: If an application to build a nuclear power station in Scotland was turned down by the Scottish Executive, but the Government promoted legislation in this House to overturn that decision and grant planning permission, would the hon. Gentleman support that legislation?

Bill Tynan: My position is quite clear: I do not expect that situation to arise, and I cannot answer a hypothetical question. The answer is the one that my right hon. Friend the Secretary of State gave. The hon. Gentleman should accept it, as it suits his argument.
	The SNP would rather be involved in splits and create division between the Scottish Parliament and Westminster than accept the fact that those two bodies work well with each other in the interests of the people of Scotland.

Peter Duncan: The hon. Gentleman rightly points out that the SNP is trying to create splits and division. I accept that, but as a Scottish Conservative who has a genuine interest in creating unity in the United Kingdom, I do not understand it. Before we began the debate, the confusion seemed to be whether this issue was the responsibility of Holyrood or Westminster. It now seems that either it is the responsibility of Holyrood or we do not know whose responsibility it is. That is my understanding, but perhaps the hon. Gentleman knows better.

Bill Tynan: I do not want to go down that road, because I have already made it clear that I do not intend to speculate on what might happen in the future. However, as the Minister of State said to the hon. Member for Angus, it is clear that the Scottish Executive are able to grant planning permission for a power station.
	I want to examine the SNP's energy policy, which is a shambles. The sooner we acknowledge the need for a balanced, integrated energy policy including coal generation, wind and wave generation and nuclear power, the sooner we can consider how best to develop that policy.
	I think every Member is in favour of renewable energy. That is why the Government have invested in research and development relating to sources of such energy. Not only are they exempting them from the climate change levy; under the renewables obligation, they are pumping some 260 million into alternative energy sources.

Simon Thomas: I am interested in what the hon. Gentleman has said about the money that the Government are spending on renewables. Will he tell us how much was spent on renewables in 1999-2000, and how much was spent on nuclear energy research?

Bill Tynan: As a Minister might say, I do not know the answer but I will write to the hon. Gentleman.
	Even British Energy, a private company, is currently prepared to invest 600 million in wind farms off the Isle of Lewis that have the potential to produce 600 MW. But our position would be untenable if we ruled out nuclear power per se; if we did so, we would end up without a policy to meet the requirements of our people.

Angus Robertson: I thank the hon. Gentleman for giving way. He has been generous with his time.
	The hon. Gentleman said that it would be dangerous to rule out the decommissioning of nuclear plants. Like me, he is interested in the pursuit of policies in other European countries. It may not be well known that, in Germany, our allies in Europe are in government along with the hon. Gentleman's allies in Europe. Both parties, the Social Democrats and the Greens, have passed policy in favour of decommissioning all Germany's nuclear power stations. If that is right for Germany, why is it so wrong for us in Scotland?

Bill Tynan: Whatever Opposition Members may think about the demise of nuclear power, 31 reactors are being constructed in 11 countries. Finland is on the verge of ordering a new nuclear power station. Moreover, 35 per cent. of the European Union's electricity comes from nuclear power stations, which makes nuclear power the largest single source of electricity in Europe. We must look again at nuclear power stations, and decide whether we are prepared to become dependent on other nations for our electricity.
	I believe that the policy presented to us today would pose enormous problems. The Scottish National party needs to get its energy policy together, and I hope it will do so sooner rather than later.

John Thurso: When I first read the motion, I considered it rather lighta bit of a Woolton pie, lacking in meat. As the debate has progressed, however, it has become clear that far from being a Woolton pie, it is something of a Beef Wellington. SNP members certainly seem to have found something pretty interesting below the crust.
	Initially I concluded that the motion posed a pretty simple question, and that there ought to be a pretty simple answer. The pretty simple question was Who is responsible for saying yes or no to planning for a nuclear plant, or any other power generation plant, in Scotland?. Was it Holyrood, or was it Westminster? The simple answer, I thoughthaving consulted the Scotland Act 1998, and having heard what the Minister for Industry and Energy had to saywas that planning permission was a matter for Holyrood, and that that was where the decision would be made. Matters relating to generation and so forth would be dealt with at Westminster.
	I have listened to this evening's debate, and believe that it amounts to the longest don't know in history. It is perfectly clear to me now that I do not have a clue whether it was a simple question with a simple answer.
	The hon. Member for Banff and Buchan (Mr. Salmond) has quoted already the comments of the Minister for Industry and Energy. However, he left out a sentence. The Minister said, The position is unambiguous, but he also said:
	All of the relevant powers are devolved to Holyrood.
	Certainly, that was my understanding, and I think that that probably is the position, but I suspect that the Government do not really know. I hope, therefore, that the consultation will sort out where we are going.
	Of course, Westminster Governments are always able to revisit the Scotland Act 1998, and the devolution settlement. Clearly, the concept of devolution is based on this Parliament remaining sovereign, with certain powers devolved to the Scottish Parliament. It is possible for any Government to propose to go back on the powers that have been so devolved. However, all supporters of devolution and of the settlement finally enacted by this House would find it unacceptable if a Government were to go back on the current settlement.
	On countless happy evenings in another place, my noble Friends and I sat opposite Lord Sewel, trying to get the Government to accept a variety of amendments that would have widened the powers of the Scottish Parliament on a range of issues. In each case, the Minister knocked us back. We were told that we had to be careful and to ensure that what was put in place was right. We were told that the mechanism had to be workable, without ambiguity.
	For many who took part in the debates in the other placeand I am sure that the same applies to those who took part in the debates in this Housethe devolution settlement that we got was the minimum. It was really quite conservative, with a small c. We were happy to get it, but we believed that, if anything, it was a settlement that could be taken further in the future. We did not think that the Government could go back on it, but there is a worrying undertone that the Government are considering bringing powers back to Westminster. I sincerely hope that the Government will not go down that road, and that the devolution settlement will be honoured.

George Foulkes: The history of the past two and bit years has not been as the hon. Gentleman has described. The Government have introduced one executive order after another under section 63 of the Scotland Act, giving more devolution and power to the Scottish Executive and the Scottish Parliament. Most recently, that has happened in relation to the ferries running between Rosyth and Zeebrugge, and between Campbeltown and Ballycastle. The picture is entirely different from the one that the hon. Gentleman has painted.

John Thurso: I welcome all that the Government have done in that regard. I did not accuse them of going back on the devolution settlement. I said that the worrying undertone to the debate causes me concern. My hope is that the process that the Minister described will continue, and that devolution will advance rather than retreat.
	There are only so many ways in which a question can be asked and still secure a don't know for an answer, so I shall move on from a matter that I think has been done to death. I turn now to Wales, which my party believes would be better served with a devolution settlement that more closely resembles the settlement for Scotland. Such a settlement would give Wales a Parliament with the ability to enact primary legislation. People who believe in devolution, as I do, do not understand why it should not be right for the Welsh to have the same devolution settlement as the Scots. One day, the English may be able to have it too. We live in hope.
	I hope that the Government will listen to the voice of the people of Walesalthough, in that respect, the power clearly lies here in Westminster. I hope that the Government will accept the spirit of what is meant by the phrase listening to the Assembly.
	It seems to me that the real substance of what I had hoped would be debated this evening under the motionI did not anticipate what was debated earlier, so I should learn to read Scottish National party motions more carefullywas energy policy generally for Scotland. To be perfectly honest, I thought that I would not find it too difficult to support the motion in the name of the hon. Member for Banff and Buchan (Mr. Salmond) and his hon. Friends. However, I have read part of it reasonably carefully, and its defect is that it does not refer to the sustainability of energy. It refers to a strategy for developing indigenous sources of energy, and it refers to coal, gas and renewables. The key point missing, the inclusion of which would have made the motion perfect, was that the strategy should be one of sustainable energy.
	Ultimately, sustainability is the key in terms of producing energy andlying behind this whole debateour commitment to Kyoto. We must reduce emissionsCO 2 emissions are one of the biggest dangers that we face.

Alex Salmond: Does the hon. Gentleman accept that one of the misconceptions of the debate is that to conform with Kyoto one would have to go down the nuclear route? Clearly, renewables conform with Kyoto, as does combined cycle gas if it moves to 60 per cent. efficiency as has been achieved at Peterhead. Clean technology coal also has a much more beneficial environmental impact. Does the hon. Gentleman agree that it is a fallacy to say that the only way to conform to Kyoto is to be forced down the nuclear route?

John Thurso: May I say to the hon. Gentleman what has been said before? I urge him to have a little patience, as I hope to deal with that point later.
	A consideration of carbon dioxide emissions is crucial, so we must examine some of the facts. I am lucky that I have in my constituency a scientist, Dr. Eric Voice, who was formerly at Dounreay but who now works independently as a consultant on emissions. I asked him to consider a number of factors with regard to carbon emissions in Scotland. The information that he gave me is extremely interesting, and may be helpful in this debate.
	The last year for which reliable figures are available was 1998, when Scotland produced 72,300,000 tonnes of carbon emissions. Of that, 17 million tonnesor, roughly, 24 per cent.were produced by electricity generation. We must recognise that only a quarter of emissions in Scotland are from that source. Of that generation, 19.7 terawatt hours are currently from nuclear power. If that were replaced by clean coalmedium sulphur bituminous coalit would require 6,100,000 tonnes of coal, which would produce 20 million tonnes of CO 2 . That would double the CO 2 emissions currently produced by our electricity industry. If gas were to be used, the figure would be about 12 million tonnes of CO 2 .

David Hamilton: Does that mean that the hon. Gentleman and the Liberal party oppose the expansion of the coal industry?

John Thurso: No, I do not think that that follows. I am merely trying to set out the scale of the problem. I shall then consider what we should do to deal with it.
	Given the scale of the carbon emissions problem, those of us who are in favour of renewablesthe use of which has support on both sides of the House, and of which the Liberal Democrats have always been strong supportersshould pose exactly the same question. What are the problems in achieving, for example, those 19 terawatt hours? If we were to use a 3 MW turbine, which is probably slightly better than the best currently available, and to assume a load factor of installed capacity of about 25 per cent., which is better than any turbine is currently producing, that turbine would produce about 6,570 MW per annum. That broadly means that we would require 2,891 turbines to produce the same generating capacity that is currently produced by nuclear energy. It is all perfectly possible, but the disadvantage is that one would require 2,000 sq km for those turbines. Clearly, that would present equal problems of which those of us who support renewables must be aware. It is more honest to say that we support renewables knowing what we seek to achieve.
	The figures quoted mean that if we are to have a genuinely balanced approach and a genuine reduction in carbon dioxide, it is vital to work on our hydro schemes; they are a great asset in Scotland, and we must have new ones. We have to invest in renewables and the level of investment in them must be similar to that which we put into other technologies. We must also look at the way in which we use our energy, which means thinking a little bit out of the box. Scotland, particularly my constituency, has an ability to generate an immense amount of renewable energy but there is a difficulty in transporting it to the jobs and factories in the deep south. Perhaps we should be thinking about moving the jobs and factories up to where the energy is. Perhaps that will be part of the new reality of the future.
	Our policy on nuclear energy is perfectly straightforwardto decommission nuclear stations when they come to the end of their useful lives. The current nuclear capacity buys time to make the investment required in renewables so that that they can become a proper and sustainable part of our energy future.

Peter Duncan: What is the hon. Gentleman's response to the statistic that the entire wind capacity in Scotland comes to only 20 per cent. and that that capacity would be lost if Cockenzie power station closed and was not replaced?

John Thurso: I am not sure that I completely understand the hon. Gentleman's question. I have been careful to talk about renewable energy, which is not just about windit is onshore and offshore. The Pentland firth has a tidal race that is consistent, not constant. We have wave power and biomassindeed, a whole range of renewables. We must work out which renewable works at which time in the best way so that we can put the information together.
	When the energy review is accepted, or rejected, by the Governmentfrom what I have seen, I hope that they will accept much of itI hope that we will have an energy policy that is designed to make the necessary investment and create a future energy market using our renewables. Despite all the don't knows, I hope that the Scottish Parliament will take decisions on planning matters in Scotland.

Russell Brown: I notice from the clock that between my hon. Friend the Member for Hamilton, South (Mr. Tynan) and myself, we will probably have had some 26 minutes of Back-Bench speeches in a three-hour debate. I appreciate that you endeavour, as best you can, to control the situation, Mr. Deputy Speaker, but it is somewhat disappointing that we may have only two Back-Bench speakers this evening.
	I have been trying to determine whether the debate is about devolution issues such as the planning processes undertaken by local authorities, or whether it is no more than another opportunity for Scottish National party Members to state their views and their case against the nuclear industry and nuclear power generation.
	As my right hon. Friend the Secretary of State for Scotland suggested earlier, section D4 of part II of schedule 5 of the Scotland Act 1998 makes it clear that nuclear energy is a reserved matter. Schedule 4 of the Act spells out that the Scottish Parliament is charged with the duty to legislate on planning and reserved matters. Why should that be? It is simply in order to ensure that there is consistency as regards devolved and reserved matters.
	Whatever the nature of today's debate, I want to consider the issue that causes the SNP the most difficulty: nuclear power. The performance and innovation unit's energy review document issued in the middle of last month ruled nothing out. The longer-term role of nuclear power in energy policy was examined in the review, and the report merely recommended that the options for new nuclear investment need to be kept open.
	What was the reaction to that? Regrettably, there was nothing but the usual SNP paranoia. The party saw that recommendation as a signal for new nuclear build. However, let us be clear: if new nuclear plants are to be constructed, the market will bring forward the proposals.

Alex Salmond: When the hon. Gentleman says that the market will bring forward proposals, does that mean that the huge nuclear subsidy currently in the legislation will be ended? Is he talking about the market or about the rigged market?

Russell Brown: I am talking about the market, and it is not rigged, as the hon. Gentleman has claimed on many occasions.
	The Government fully believe that the existing nuclear stations should continue and naturally they must operate at the current high safety and environmental standards that we expect.
	Over the next 15 years or so, nuclear plants will continue to make significant contributions. During the next 20 years, we shall see the scheduled closure of the three Scottish stationsthe two advanced gas-cooled reactors at Hunterston and Torness, and the British Nuclear Fuels Magnox facility at Chapelcross, in my constituency, which produces 196 MW of power. That amount may seem small and insignificant but it has some importance in our local area, although I shall not elaborate on that point.
	It is important to remember the contribution made by nuclear power in the daily life of each one of us: 25 per cent. of the power generated in the UK is nuclear based and twice that amount50 per cent. of electricity in Scotlandcomes from a nuclear source. When those three stations close, a significant gap will have to be filled. Who can tell what replacement source will be found? I have to point out to Scottish and Welsh nationalist Members that it will not come just from renewables.

John Robertson: My hon. Friend may share my concerns about nuclear power. However, I am also concerned that if we do not consider all forms of energy we may be left with no energy at all in future.

Russell Brown: My hon. Friend makes an important and interesting point. Secure energy sources will be vitally important.
	I may not have searched hard enough, but I have yet to find anyone who is opposed to renewable sources of energy. None the less, despite the enthusiasm on all sides and the efforts that will be made in the years to come, I firmly believe that in no way can renewables replace our current levels of nuclear power generation.

Michael Connarty: Some of us in Prasegthe all-party group on renewable and sustainable energyare concerned that in Denmark, for example, a major wind farm proposal has just been withdrawn, and it is now admitted that there are problems with intermittent supply from sources such as wind power. The wind power strategy in Denmark is backed up with a punitive energy tax, which no one ever mentions when they talk about renewables. Renewables are attractive if energy is so expensive that people have to turn to other sources, as they do in Denmark.

Russell Brown: My hon. Friend has a great deal of experience in such matters. As we all know, there is a price to pay for renewables.
	UK-wide we have 15 operational nuclear stations and the effect of those stations is to reduce carbon emissions by 11 to 22 per cent., or 12 to 24 million tonnes of carbon. The figures vary widely, depending on whether we would replace that form of generation by gas or coal.
	We should consider what is being said elsewhere about energy supply and energy policy. The House of Lords Select Committee on the European Union, in its report on the security of energy supply, recommended that the EU should aim at least to retain its present proportion of nuclear power and, importantly, that it should examine what is necessary to achieve that. The Select Committee also stated that it should be recognised that nuclear power is a key component of energy security and environmental performance, and provides more than one third of Europe's electricity. It will reduce the EU's CO 2 emissions by more than 300 million tonnes in 2010.

Iain Luke: Does my hon. Friend accept that the growing involvement of the EU, as evidenced by the Green Paper published a year ago, means that the issue of consent on a national and regional basis may be circumvented by the need for the European Union to take powers to ensure the security of energy supply in future for the whole of Europe, on an individual nation basis?

Russell Brown: I thank my hon. Friend for his intervention. He is right. There is much happening out there. We cannot remain in isolation. I hope that we in the House will look at the matter UK wide. Our perspective needs to be much wider than that of the nationalists.

Annabelle Ewing: Will the hon. Gentleman give way?

Russell Brown: Of course.

Annabelle Ewing: I thank the hon. Gentleman for giving way so graciously. Does he not agree, then, with his hon. Friend the Minister for Industry and Energy, who said:
	The position is unambiguous. If anyone wants to build a power station of any kind in Scotland it will be a matter for the Scottish Executive to determine. End of story?
	[Interruption.]

Russell Brown: The murmurings from the Front Bench are a noise to reckon with.
	The House of Lords Select Committee recommended that the Government should maintain the UK's ability to produce not less than 20 per cent. of electricity from nuclear.
	In its report on energy policy, the Select Committee on Trade and Industry made it clear that nuclear has a significant role in maintaining the security and diversity of electricity supply. It recognised that nuclear makes a key contribution to environmental objectives such as the reduction of greenhouse gases, and it urged the Government to make a clear statement on the future of nuclear energy as quickly as possible. It is that security of supply which means so much to the public.
	At a local level, the nuclear power station in my constituency, Chapelcross, was the location of an incident in July last year, as some hon. Members know. The hon. Member for Angus (Mr. Weir) saw fit to table an early-day motion on 18 July last year, part of which stated
	That this House . . . is extremely concerned that 12 fuel rods apparently remain unaccounted for and that there appear to have been attempts to cover up the incident.
	Frankly, that is politics at the lowest level. Had the hon. Gentleman checked with the site, he would have been told that all 24 rods were accounted for the previous day. At no stage did that company attempt to cover up the incident. I do not suppose that the hon. Gentleman will apologise to the House but, more importantly, he should apologise to the work force at the site.
	A number of the hon. Gentleman's colleagues visited the site. Before their arrival, there was great talk in the Scottish press of the need to shut down the plant which, during the visit, developed into a need to close it at the end of its lifetime. They walked away from that site visit stating that position clearly.

Michael Weir: The hon. Gentleman knows that it has always been the policy of the Scottish National party to close the plant at the end of its technological or economic life. I am not responsible for what is said in the press, locally or nationally, but at no time have we called for the immediate closure of Chapelcross.

Russell Brown: Although I do not believe everything I read in the press, I have some confidence in the trade unions at the site which picked up that message from the SNP.
	At the time of the incident, British Nuclear Fuels began to shut down other reactors on the site so that it could concentrate its efforts on examining the problem in detail. However, that action caused Scottish Power considerable anxiety because it threatened its security of supply, and there was serious concern that there would be blackouts and power cuts.
	At the end of last year, the Office of Gas and Electricity Markets issued a consultation document on access to the Scotland-England interconnector. That is so vital to the economic viability of the Chapelcross site that a local petition was organised within the community which collected more than 5,000 signatures in a weekend. In addition, a number of individuals made representations on the matter, including politicians at a local and national level. If the SNP supports stations operating until the end of their lifetime, why was no support offered by the two list SNP Members of the Scottish Parliament from the south of Scotland, Christine Graham and Mike Russell? Mr. Mike Russell had previously visited the site, but those MSPs showed no support for it or its work force.
	The Ofgem consultation closed on 21 January and it was due to issue its findings 10 days later. I want the House and the SNP in particular to be aware that Ofgem did nothing more than issue a holding statement last Friday, some four weeks late. Lying behind that delay is the fact that Ofgem has listened to the anxiety expressed by the work force, the company and local people, who are worried that the inability to use the interconnector will cause the site to close and the loss of 450 jobs.
	In last week's statement, Ofgem said:
	Ofgem has taken on board the concerns raised. It is prudent, in the light of these concerns, for Scottish Power Transmission Ltd. to review its criteria to address system security issues
	in other words, security of supply. A station that generates 196 MW may seem insignificant to many people, but it is fairly significant for the locality and greatly significant for Ofgem, the organisation that ensures that people receive a supply of electricity. Although the non-nuclear bandwagon sounds promising to those who want to climb aboard, once the lights are out it is not so easy to turn them on again.

Michael Weir: The one thing that has become clear in this debate is why the Minister for Industry and Energy chose not to be present to hear ithe was here earlier, but has decided to make himself scarce. When we strip away all the obfuscation and unpeel the Secretary of State's excuses and dancing on pin heads, it is clear that he was incorrect and that he did not know who was responsible for planning permission for nuclear power stations in Scotland. Frankly, that is a deeply frightening thought.
	It seems clear, as eventually emerged from the Secretary of State, that she believes that Westminster, not Scotland, will ultimately make the decision. That flies in the face of what the Minister for Industry and Energy said not only last week, but in his letter to my hon. Friend the Member for Banff and Buchan (Mr. Salmond) and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). He made clear time and time again his belief that the ultimate decision lay in Scotland. It appears, however, that the Scotland Office is now overriding the Department of Trade and Industry on these matters. Again, that is deeply worrying.
	The debate was opened by my hon. Friend the Member for Banff and Buchan, who set out, in a typically powerful speech, its context, which relates not only to nuclear aspects and energy resources but to the whole constitutional position. With regard to that context, the Minister of State said:
	It would look a wee bit daft if, in reserved areas, decisions were being made north of the border which had a very significant impact south of the border.
	Will he tell us whether that means that, if the Scottish Parliament makes a decision that has an impact in EnglandI can think of several such decisions that might be on the wayWestminster will try to take back the powers from it? That is the subtext of what is happening, leaving aside the whole energy matter.

Helen Liddell: Will the hon. Gentleman tell the House whether he agrees with his parliamentary leader on the use of civil disobedience?

Michael Weir: The Secretary of State seems to be hung up on that issue. The question of what will happen if Westminster decides to overrule the democratically elected Scottish Parliament will be decided when that happens. I agree with what my hon. Friend the Member for Banff and Buchan said on the matter. He clearly answered the right hon. Lady's question and I have nothing to add. I say to her that there is a long history. I will make an admission in that regard: way back in the 1970s, I visited Torness, which did not have a nuclear power station at the time, but was being occupied as a protest against the building of such a power station. It is sad that, 20 years later, we are having to advance the same arguments yet again.
	It was interesting that the Minister of State seemed quite happy to be described as the Baldrick of Scottish politics. I seem to recall that Baldrick's only friend was a turnip, so perhaps the description is fairly appropriate.

John Robertson: Does not the hon. Gentleman think that there may be a slight conflict in what he is saying? On the one hand he is talking about democracy, while on the other, he is talking about civil disobedience. Will he tell me how those ideas marry up, and perhaps give us some of the nationalist policies that seem to be missing from every contribution we have heard from those Benches?

Michael Weir: Democracy also extends to the Scottish Parliament. We have a devolution settlement that has been overridden unilaterally from Westminster. That is the implication of what has been said, and that is why the Scottish people are prepared to protest. I am surprised that the hon. Gentleman, who I believe has a long history in the trade union movement, is opposed to such use of civil disobedience, which has played a large part in the history of the labour movement and, indeed, in parliamentary democracy. I would therefore ask him to think again. [Interruption.] Unlike Labour Members, I am capable of writing my own speeches and I do not pass them around.
	We must examine our position in view of, for example, our undertakings under the Kyoto protocols. The performance and innovation unit report lumps nuclear power together with renewables as low carbon producers. It treats nuclear power in the same way as renewable resources. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made a good point about sustainability, which we ultimately seek in energy supply. However, since the advent of the Kyoto protocols, the nuclear industry has absurdly pushed itself as environmentally friendly. It conveniently forgets that, although we might reduce carbon emissions, we would store up a huge problem of nuclear waste which would take generations to tackle. Perhaps we could never deal with it.
	The hon. Member for Beckenham (Mrs. Lait) mentioned the market. We are considering a nuclear industry that will create a problem that will last not for years but for generations. We have witnessed all too clearly what can happen even to large energy companies.
	The Government appear to have swallowed the nuclear argument hook, line and sinker. The latest spat between Ministers is simply another straw in the wind. The creation of the assets management agency was announced recently. It is an expensive excuse to make nuclear generators more acceptable to investors by removing their historical liabilities. However, they will continue to accrue if new stations are built.
	The Scottish Parliament's planning powers present a substantial road block in the way of the nuclear industry in Scotland. I believe that the Government's attempt to remove it has led us to our current position. The SNP's policy is clear. We have consistently called for investment in renewables. I have done that in this Chamber and in Westminster Hall. Different forms of energy are available in Scotland.

David Hamilton: An energy policy should be a British policy. Does the hon. Gentleman acknowledge that the Department of Trade and Industry has invested between 40 million and 50 million of subsidy in Scottish Coal? Could the Scottish Parliament have done that? It would not have had the money; a British Government had to do it. Energy policy should be left not to Scotland but to Britain. We should discuss a British energy policy. I shall not mention nuclear power or civil disobedience, but I strongly believe that we should consider an energy policy that covers Britain and is devised by a British Government.

Michael Weir: On money, it was announced last week that the Scottish Executive underspent by more than 200 million. That is interesting, because they also underspent last year.
	We must invest in a basket of different sorts of energy. Nuclear power has no place in it. We have discussed the cost of nuclear power, but the Government's advisory group for the PIU's energy review mentioned the cost of different forms of energy. It stated that, without Government subsidy, the cost of nuclear power was approximately 6.5p per kW. The cost of current new-build designs was down to 3.9p per kW, but onshore wind costs less than 2p a kW and offshore wind, between 2p and 3p a kW.
	Nuclear energy is much more expensive in the first instance than other forms of energy, especially renewable energy sources. That has been mentioned in the Select Committee on Trade and Industry report on the security of energy supply, but when the Committee took evidence from representatives of the nuclear industry, they clearly stated that financial assistance was required to bridge the gapthat is, to make nuclear power more acceptable economically. They talked about a subsidy of about 1p per kW. So going down the nuclear energy route is much more expensive than the renewable and sustainable route.
	The hon. Member for Beckenham is correct to say that the nuclear power stations are due to come off stream in the next few years. As I have said on numerous occasions in this Parliament, if we are to bridge the gap that will be created, investment must be made now in all the renewable sources. Although the Government always talk about renewable energy sources, they have not made that significant investment.
	Let us compare the investment in the nuclear industry with that in renewable sources. For example, in 1999 alone, 26 million was investment in research and development in the nuclear industry. Some 3.7 billion will be needed to cover the liability of the Magnox stations, which have been mentioned already, and United Kingdom electricity consumers have already paid some 2.6 billion to fund nuclear energy through the non-fossil fuel levy. So there has been massive investment in the nuclear industry over the years, and it will continue to need a subsidy if we are to go down the nuclear route.
	The hon. Member for Hamilton, South (Mr. Tynan) clearly made a pro-nuclear intervention. He talked about an integrated coal, wind and wave system, but the point is that, to have an integrated system, investment is needed now, and we have been trying to make that point. There is nothing strange or hidden about the SNP policy on energy; it has been made clear, particularly by me, on many occasions.

Michael Connarty: The hon. Gentleman has not mentioned the policy on the present state of Scottish Coal. The last deep mine is in trouble; it needs 5 million to get through a major fault, but it has not been mentioned by the SNP. Is the SNP abandoning Scottish Coal and the last deep mine in Scotland?

Michael Weir: Coal is mentioned in the motion, but not in the Government amendment. I responded to the hon. Member for Midlothian (David Hamilton) on the coal industry, and I have spoken about it previously, as well as the need for clean coal technology. The Government ultimately say that their policy is pro-nuclear. That is what we clearly hear from Labour Members, but I wonder whether that policy will be persuasive even to the current Scottish Executive.
	I remind hon. Members that, when announcing new targets for renewable energy sources in a speech on 19 February, Jack McConnell, the Scottish First Minister, said:
	Scotland has an enormous resource of renewable sources . . . we already expect to exceed our initial target of generating 18 per cent. of our electricity by 2010 from renewables.
	Today I want to signal our intention to increase that target . . . we will consult on it . . . but I hope we can work towards 30 per cent. of our electricity coming from renewable sources by 2020.
	That figure is much higher than this Government have suggested, and it is a clear signal that even the current Scottish Executivelet alone the nextis more committed to renewable sources than the Government. I hope that, if they truly represent the views of the Scottish people, they will oppose any new nuclear stations that this Government try to foist on them.

Robert Key: Will the hon. Gentleman give way?

Michael Weir: I am sorry, but I am running out of time.
	I remind hon. Members that the Scottish Executive commissioned a study by Hassan Consulting which pointed out that Scotland could supply its energy needs from renewables. It said:
	The scale of this potential is illustrated by one stunning statistic: there is enough potential energy from onshore wind power alone to meet Scotland's peak winter demand for electricity twice over. In all, the total resource amounts to 75 per cent. of the total UK existing generating capacity.
	Scotland can meet its energy needs from renewable resources. It does not need nuclear; it does not want nuclear; and it will oppose nuclear.

George Foulkes: I congratulate the hon. Member for Angus (Mr. Weir) on his enormous generosity in absolving anyone else of responsibility for his speech. I am sure that SNP researchers in particular will be deeply grateful that their reputation has been restored.
	A number of hon. Members have made the point that one of the most astonishing things about today's debate is that, given the opportunity of a once-a-year, three-hour debate on the Floor of the House, the SNP chose to discuss an apparent difference between the Minister for Industry and Energy and me about a hypothetical decision that might be taken a number of years from now. Let us think of the topics that it might have chosen. It could have selected the whole energy review as it affects Scotland. We have drifted on to that subject, but it could have been the main focus of our discussion. It could have selected the implementation of the Proceeds of Crime Bill, which aims to crack down on drug dealers and money launderersissues of real concern to my constituents and the rest of Scotland.
	The SNP could have spoken about the Scottish economy, but we know now why it dodged that subject. The hon. Member for Banff and Buchan (Mr. Salmond) has made dire predictions and accused my right hon. Friend the Secretary of State of talking up Scotland, and he has fervently hoped and prayed for a downturn in the Scottish economy, but his predictions have been proved entirely wrong. Output has risen sharply in the service sector, according to the Bank of Scotland report published yesterday, and manufacturing output is at last on the turn.

Alex Salmond: At last.

George Foulkes: Indeed. Given last week's seismic event in Perth, one would have thought that the SNP would jump at the opportunity to debate its now explicit commitment to independence and separationbut of course that represents the policy of the Swinney wing of the party, rather than the Salmond wing.
	As we are on the subject of energy, let us examine the hon. Gentleman's credentials to talk on the subject. Where better to look than at his weekly column in the News of the World? The Register of Members' Interests shows that the hon. Gentleman receives between 10,000 and 15,000 per annum for the column, so it must be good, it must be accurate and it must be authoritative. He says:
	The problem for London Labour
	he always calls us London Labour, no matter that we come from Glasgow, Dundee and elsewhere
	is that they are looking to create a new generation of nuclear power stations
	wait for it
	when existing ones like Dounreay reach the end of their life.
	Dounreay? An existing nuclear station? As my hon. Friend the Member for Dumfries (Mr. Brown) pointed out, the existing power stations are Torness in East Lothian, Hunterston in Ayrshire and Chapelcross in Dumfriesshire. Dounreay is a prototype fast breeder reactor, as the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) knows only too well. The hon. Member for Banff and Buchan referred to Dounreay reaching the end of its life. There is something else he should know: Dounreay is currently being decommissioned.

Alex Salmond: I may be one of the few Members to have visited every fast reactor in the world, with the sole exception of one in Russia. I am sure that the Minister has not done that.
	Let us get to the nub of the matter. The quote from the Minister for Industry and Energy is important and has been well advertised. He said:
	The position is unambiguous. If anyone wants to build a power station of any kind in Scotland, it will be a matter for the Scottish Executive to determine. End of story.
	Forget all the fluff and flannel: does the Minister support that? Is it correct, or is it not?

George Foulkes: The hon. Gentleman's authoritative column in the News of the World includes a picture of Dounreay, next to which appears the caption, Atomic dud. It is not Dounreay that is the atomic dud. I think we all know who that is.
	If we had had a substantive debate on the energy review, we could have talked about the Prime Minister's vision in setting the PIU to consider energy policy for the next 50 years. That review was chaired by my hon. Friend the Minister for Industry and Energy. I was there to represent the interests of Scotland and closely consulted Ministers and officials in the Scottish Executive to ensure that Scotland's views were properly known. The review had the important remit of ensuring security and diversity of supply. Several Members have mentioned security of supply, particularly for gas imports. Diversity of supply means providing more than one, or one and a half, areas of supply.

Annabelle Ewing: Let me return to the central point of the debate. Does the Minister stick by what he said in answer to me at the Scottish Grand Committee on 13 February? He said then that responsibility for agreeing on new power stations was devolved to the Scottish Executive and the Scottish Parliament, which accords with what the Minister for Industry and Energy said. Does he agree with that, or does he now adopt the new view expressed in his recent BBC interview?

George Foulkes: My right hon. Friend the Secretary of State dealt with that point extremely well.
	If we had discussed the energy review, we would have been able to discuss what the hon. Member for Caithness, Sutherland and Easter Ross rightly called our important commitment to hitting our Kyoto targets. The review recommends a major expansion of energy efficiency.

Alex Salmond: Will the Minister give way?

George Foulkes: No, no, no. The hon. Gentleman had 32 minutes, and he spent half of them attacking me. I have only eight minutes in which to reply, so he can sit down.
	The energy review recommended hugely increased, challenging targets for renewables, which will not be easily achieved. SNP Members deceive people if they lead them to believe that the renewables obligation can be easily kept.

Alan Reid: Will the Minister tell us who has the final say on whether a nuclear power station can be granted to Scotland? Is it a Scottish Minister, is it a United Kingdom Minister, or does the Minister not know?

George Foulkes: I love multiple choice questions. My right hon. Friend the Secretary of State has explained the position. Since the hon. Gentleman represents the provisional wing of the Liberal Democrats and is an unreconstructed Luddite, perhaps he might come and talk to me afterwards.
	Let us do the SNP the courtesy of examining its energy policy and taking it seriously, no matter how difficult that may be. Let us go back to the words of the hon. Member for Banff and Buchan, not this time in the Press and Journal, the house journal of the SNP, in a weekly column for which he also receives between 5,000 and 10,000, but from his column in the News of the World.
	Gas, clean coal technology and renewablesthat would be a sensible, cheaper and Scottish energy policy,
	says the tabloid tipster. Let us be honest, as, to give her credit, the hon. Member for Beckenham (Mrs. Lait) has been on this point. Nuclear power stations will come to the end of their lives over the next few decades. Our coal power stations will also come to the end of their lives, as my hon. Friend the Member for Midlothian (David Hamilton) knows only too well. Of course, coal is still an important energy source. One third of the UK's electricity needs were met by coal last year. Apart from Longannet, however, Scotland now has no indigenous deep-mined coal, yet the Scottish National party opposes all open-cast applications. That would mean that we would have to rely even more on imported coal, and that there would be more CO 2 emissions, even with the clean coal technology that this Government support.

Michael Connarty: Will my hon. Friend, unlike SNP Members, answer the question that Scottish Coal is asking at the moment? Will our Government look seriously at the problems involving the fault that Scottish Coal has found? It will require at least 5 million to tide it over until it gets back into production. Will we look at the matter seriously, unlike the SNP, which has refused to talk about it this evening?

George Foulkes: Yes, we have already given Scottish Coal 41 million. My right hon. Friend the Secretary of State and I have had discussions with Scottish Coal's management and with the unions, and we are looking at the issue very seriously. This is an important matter.
	As my right hon. Friend said, oil and gas reserves are being extended by the pilot initiative that she started, which is now under the stewardship of my hon. Friend the Minister for Industry and Energy.

Robert Key: Where is he?

George Foulkes: He is in Scotland, fulfilling a long-standing engagement.

Alex Salmond: rose

George Foulkes: The hon. Member for Banff and Buchan has had many opportunities to speak.
	Oil and gas reserves are finite, even when we take into account all the work that we are doing with carbon sequestration. That leaves us with renewables, which the Government strongly support. The renewables obligation will mean that there will be a 1 billion market for renewables by 2010, which will represent a very significant part of our energy sources. There are problems of transmission, however. Power lines and under-sea cables are expensive, and they are not popular, as we know from the Northern Ireland interconnector.
	Furthermore, all these developments need planning approval, and that is not a foregone conclusion. So, over the next few decades, we could be faced with having to decide between agreeing to an application for a new nuclear power station, and having increased electricity costs, more CO 2 emissions and seeing the lights go out all over Scotland at peak times. None of us would be very popular if that were to happen. That will not be an easy decision, and I am not sure that whoever has to make it will welcome the responsibility. Surely, however, it is right that we should attempt to clarify now exactly who will be making those decisions.
	I confess to the House that I made one mistake. The mistake was to believe that, if I raised an important issue in publicopen government at work, if you likethe SNP Opposition would be willing to have a sensible debate about it, instead of the Pavlovian reaction that we have seen today. [Interruption.] The hon. Member for Caithness, Sutherland and Easter Ross has rightly pointed out that it was I who raised the issue. Every time an issue is raised, howeverbe it on energy policy, immigration policy or defence policythe nationalists are never prepared to discuss its merits properly. Instead, they claim that everything would be better if it were decided in Scotland. That is the magic bullet that will solve every problem.
	The nationalists are obsessed by the constitution, because their only political aim in life is to break up Britainpeople, especially Conservative Members, should recognise thatto tear the United Kingdom apart, and to lead us into a constitutional confrontation. [Interruption.] I was just trying to wake the hon. Member for Beckenham up, Mr. Speaker. At the weekend, the nationalists had to admit that a separate Scotland would not automatically be a member of the European Union. It could reject policies such as the common fisheries policy, raising the spectre of a new cod war. This is only one of the many uncertainties we would face if Scotland were ever duped into a divorce from the rest of the United Kingdom.

Alex Salmond: rose in his place and claimed to move, That the Question be now put.
	Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:
	The House divided: Ayes 43, Noes 303.

Question accordingly negatived.
	Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):
	The House divided: Ayes 299, Noes 44.

Question accordingly agreed to.
	Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
	Resolved,
	That this House has confidence in the process of granting planning consent for new nuclear power stations in Scotland and Wales; notes the benefits of addressing issues relating to energy policy within a UK framework; welcomes the contribution of the recent PIU Energy Review to the debate on energy policy; and welcomes the intention of HM Government and the devolved administrations to work in partnership in implementing an energy policy to ensure energy supplies are secure, competitively priced and sustainable.

Paul Burstow: On a point of order, Mr. Speaker. Have you had a request from the Secretary of State for Health to allow him to come to the House and apologise for letting 1,000 written questions go unanswered by his Department since the start of the Session? Written questions are one of the few ways in which hon. Members can hold the Government to account. How can we have confidence that Ministers who can preside over such a fiasco will deliver relevant and helpful answers on time?

Mr. Speaker: Often, on behalf of the House, I have complained to Ministers from the Chair that they should always come to the House when any difficulty arises to do with their Departments. The Secretary of State for Health, to whom the hon. Gentleman referred, has come to the House and answered a parliamentary question. Therefore, I have absolutely no complaint about him.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Local Government

That the draft Local Authorities (Conduct of Referendums) (England) (Amendment) Regulations 2002, which were laid before this House on 7th February, be approved.[Mr. McNulty.]
	Question agreed to.

EURO

Motion made, and Question proposed, That this House do now adjourn.[Mr. McNulty.]

David Laws: I am glad to be able to raise an issue of great importance to the Government's economic policy, and I am pleased that the Economic Secretary is in her place this evening. I am sure that she is eager to engage in the matters that we are to debate, which have to do with the five preliminary economic tests for joining the euro. Those tests are famous in this Parliament, but little debated.
	That there have been so few opportunities to debate a matter so important to the country's economic and political future is unfortunate, not least because Conservative Members seem to have lost some of the enthusiasm for discussing the matter that they showed at the end of the previous Parliament. However, I am delighted that one representative of the Conservative party at least is with us this evening. The presence of the hon. Member for MidWorcestershire (Mr. Luff) is most welcome.
	It is a great surprise that the Government should be so reticent about discussing some of the issues to do with the five economic tests for joining the euro, given their importance for the Government and the future of the country's economy. In particular, I draw the House's attention to a series of written questions that have been tabled over the past few months. The Economic Secretary replied to many of them, but many of the answersno doubt through the fault of the civil servants involved rather than the Ministerhave not been as full as one might have hoped. I therefore hope that she will use this debate to clarify the Government's position on a number of issues and shed more light on an extremely important issue.
	To make it easier for the Economic Secretary to respond to some of the major issues, I thought that I would put to her five simple questions about the five tests and the work that has been done to evaluate them. I hope that it will be possible for her to respond to those questions in her reply. I look forward to that.
	First, when did the Government start the preliminary work that is now under way on the economic tests for the euro? It does not appear to have started at the end of the last Parliament. We were told earlier in this Parliament that the work had suddenly begun. It would be useful to know when it began and, in particular, when it is due to be completed. We know that the evaluation of the five economic tests will not be completed until June of next year, but at the momentI am sure that the position will change later this eveningwe are at a loss as to where we are on the evaluation of the preliminary work on the tests.
	My second question relates to an issue about which it has been difficult to flush out information from the Treasury. Who precisely is involved in evaluating the five economic tests? That appears to be relatively straightforward, yet it has proved to be astonishingly difficult to get answers out of the Government about which Minister is responsible for the preliminary work, which units within the Treasury are involved in it and how many officials are engaged on it. I hope that the Economic Secretary can shed some light on those issues.
	My third question relates to the fact that it is obvious that any evaluation of the five tests must embrace the Bank of England because of its responsibility for monetary policy. We are aware from the Governor of the Bank of England that at least one bank official has been seconded to the Treasury to help with this work. Unfortunately, the Governor's correspondence with me on this point suggests that he is not sure of what the official is doing at the Treasury and what contribution he or she is making to the work. It would be most welcome to me and, no doubt, to the Governor, to know what the official is doing in relation to the five tests and the preliminary evaluation.
	Fourthly, perhaps the Economic Secretary can also tell us what parts of the preliminary work have been evaluated to date. Which bits of the work are complete and which still need a significant amount of work?
	My final question is about the work that the Government may or may not have done in judging what the sustainable long-term exchange rate for the pound is in relation to the euro. We have to resort largely to the newspapers to find out what the Government are doing on this important issue, and we understand from the Financial Times that they are using a variety of economic models from the private sector and some advisers and economists from the private sector to allow them to evaluate the tests and, in particular, make a judgment about the long-term sustainable exchange rate. That is vital in determining whether we have met the five tests. Perhaps the Economic Secretary will also reflect on that point in her speech.
	What are the Government doing not just to test whether we have met the five economic tests, but to achieve them? As we know that the Government want to join the euro and therefore presumably want to meet the five tests, we presume that they are doing something to achieve them. We know that, over recent years, our interest rates have been above those in the eurozone and that there is a convergence issue. We also know that the Governor of the Bank of England and the Chancellor consider the current rate of sterling against the euro too high and would seek a devaluation of the pound against the euro before we contemplate joining it.
	It would be immensely interesting to know what the Government intend to do and how they are co-ordinating their fiscal and monetary policies to achieve a lower exchange rate and lower interest rates. When the Governor of the Bank of England came before the Select Committee on the Treasury last week and was questioned on this point, he said that there had been no discussions with the Treasury's representative on the Committee, Gus O'Donnell, about this issue and that he was unable to factor any decision about the euro into the Bank of England's forecasts for inflation and the economy because he had no idea of the Government's intentions in this regard. He suggested that the Committee had as much idea as he did about what the Government were intending to do.
	Surely that is of great concern if the Government are seriously trying to converge in relation to the euro and meet the five economic tests. We expected at least some discussion between the Chancellor and the Bank of England about how to achieve the five economic tests and the convergence. Surely there would be some discussion about the way in which monetary and fiscal policy can work together to allow the Government to achieve those tests. It seems astonishing that there appears to have been no discussion between the Governor of the Bank of England and the Treasury or even within the Monetary Policy Committee about this issue. I hope that the Economic Secretary can not only tell us what work has been done on the tests to date and answer my five questions but explain how the Government are seeking to ensure that we meet those tests.
	The final major issue relating to the euro, which was aired, to some extent, by the Chancellor last week in relation to the new Treasury White Paper involved structural and political reform within Europe and the way in which that may contribute to us meetingor not meetingthe five economic tests. It has been no secret for some time that the Government are concerned about some of the structural aspects in Europe, such as how the European Central Bank operates, the lack of political accountability of its inflation target, and its unaccountability to politicians. Indeed, we understand that Mr. Gus O'Donnell has aired those concerns with undergraduates at various universities, although not in this place, unfortunately.
	We know that the Government consider their own inflation target and the way in which the Monetary Policy Committee of the Bank of England is established to be a far superior model to the European Central Bank. However, we have no idea about what the Government intend to do to reform the ECB or whether that is a condition of joining the euro. We would be grateful for the Economic Secretary's insight.
	Of particular importance to the Government's agenda for structural reform in Europe is the growth and stability pact. It was specifically aired in the White Paper Realising Europe's Potential, which was released by the Government last week. For a long time, the Government have expressed concerns about the operation of the growth and stability pact and the fact that it is not consistent with their fiscal policies, which allow them to borrow money to invest in capital items in this countrysensibly, in our view. It is well known that the pact does not offer the Government that flexibility in economic policy and that that might therefore be a problema sixth test, as the Chancellor put it the other dayin getting this country into the euro. For a long time, the Government have seemed to think that they could get away with what they described in the pre-Budget report last year as a prudent interpretation of the growth and stability pact. That is an odd use of prudent as it is clear that the Chancellor's view of the word is that it means less rather than more prudent.
	Until now, the Treasury's position appeared to be that there was sufficient flexibility in prudent to allow the Government to sign up to the existing growth and stability pact while retaining the flexibility to borrow money for capital purposes. We know that this is a vital issue for the Government because in the last pre-Budget report they said that they were planning to
	borrow modestly to fund increased investment in the country's capital stock.
	The Government's fiscal policy relies upon borrowing to fund the investment that Liberal Democrat and Labour Members believe is important for the country's future, yet we know that that is not consistent with the growth and stability pact.
	The paper issued by the Government last week was a movement away from their reliance on merely a prudent interpretation of the pact towards its reform. The Chancellor spelt out that change of policy last week at Treasury questions although he failed to recognise that it was a change. He said that the growth and stability pact needed improvement in three areas: the economic cycle, public investment and debt sustainability.
	If the Government's position is now that the pact is in need of improvement and reform rather than merely a different interpretation, is their policy that there should be a sixth test before we contemplate joining the euro? Will the Government suggest to the country that we should sign up to the euro in the absence of reform of the pact? That extremely important point was highlighted by the Government's announcement last week, and I hope that the Economic Secretary can shed some light on it.
	There are other considerations in Europe, such as drawing up a constitutional settlement for the European Union that would define and limit some of its powers. As Liberals, my party and I have no problem with that. We believe that Europe should be able to focus on issues such as trade, environment, foreign policy and even perhaps defence, but it should not meddle unnecessarily in matters such as tax, social and spending policies or borrowing.
	Will the Economic Secretary tell us more about the Government's policy on the constitutional convention? Will there be input from the Treasury on matters such as tax policy and spending and social policies? Will there be a Treasury obligation to obtain agreement on flexibility in those matters before we consider signing up to the euro? Will any of them form part of additional tests that the Government might impose, or are they embedded in the famous five economic tests that few people outside the Treasury seem able to remember?

Bob Russell: Name them.

David Laws: I shall not rise to the bait offered by my hon. Friend. The tests are in my notes, but I do not want to detain the Minister.
	I shall conclude my remarks soon so that the Economic Secretary has the longest possible time in which to respond and give us as much information as possible. I welcome the Government's suggestion last week that the growth and stability pact is in need of reform. The greatest hurdle against Britain's joining the euro is people's anxiety about some of the constitutional and political issues rather than the economic issues. That is almost directly opposed to the Government's view: they say that there are economic tests to be met, but no constitutional objections.
	If we can deal with issues such as the growth and stability pact, the lack of accountability of the ECB and the dangers of unnecessary tax harmonisation rather than tax competition, we shall be more successful in persuading people that they need seriously to consider the prospect of joining the euro. I hope that the Economic Secretary will respond by saying more about the important preliminary technical preparations, by explaining how the Government are going to meet the five economic tests and by telling us how they will pursue their reform agenda in Europe to persuade the British people of the economic advantages of the euro. 10.38 pm

Ruth Kelly: I should like to take the opportunity provided by this important and useful debate to address some of the issues raised by the hon. Member for Yeovil (Mr. Laws) and, of course, to restate the Government's policy on United Kingdom membership of the single currency.
	The hon. Gentleman has raised a considerable number of issues. I shall attempt to deal with as many as I can during the short time available. The question that he seemed to put most often related to the number of tests and I hope to make that clear during my response.
	Europe is fundamental to the UK economy. About 3 million jobs are directly affected by our economic ties with Europe. More than 50 per cent. of our total trade is with the European Union. The EU is our largest trade and investment partner.
	In his statement on economic and monetary union in October 1997, the Chancellor said:
	The potential benefits for Britain of a successful single currency are obvious in terms of trade, transparency of costs and currency stability.
	The Chancellor also said that
	a successful single currency within a single European market would be of benefit to Europe and Britain.[Official Report, 27 October 1997; Vol. 299, c. 583.]
	That is why, in principle, the Government are in favour of UK membership of EMU; in practice, the economic conditions must be right. That is the Government's policy, as it was set out by the Chancellor of the Exchequer in October 1997, and repeated by him in the House last week.
	The determining factor underpinning any Government decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. We have consistently said that if that is the case, there is no constitutional bar to joining.
	As the Chancellor said in his October 1997 statement, the five economic tests will define whether a clear and unambiguous case can be made. In the same statement, the Chancellor set out the five tests. These are, first: are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis? Secondly, if problems emerge, is there sufficient flexibility to deal with them? Thirdly, would joining EMU create better conditions for firms making long-term decisions to invest in Britain? Fourthly, what impact would entry into EMU have on the competitive position of the UK's financial services industry, particularly the City's wholesale markets? Fifthly, in summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?
	The Chancellor said in his Mansion House speech in June 2001 that
	to join in the wrong way or on the wrong basis without rigorously ensuring the tests are met, would not be in the national interest. Such a course would risk repeating past failures, would prejudice our stability and would be damaging for investment, business and jobs generally.
	The International Monetary Fund stated in its 2001 article IV report on the UK economy that the five tests were
	consistent with the economic considerations which would be important for the decision to join a monetary union.
	The Chancellor repeated only last week that the Treasury will complete an assessment of the five tests within two years of the start of this Parliament. The Government remain committed to that.
	Once the Treasury has completed the five tests assessment, a recommendation will be made to Cabinet. The Government will then make a decision on UK membership of EMU. If the Government recommend UK entry, it will be put to a vote in Parliament and then to a referendum of the British people.
	The hon. Gentleman called this debate because he is interested in the preliminary and technical work. The Government have been nothing but open about the nature of this preliminary and technical work. I am happy to respond to the hon. Gentleman by once again setting out the nature and content of the that work.

David Laws: The Minister and her abilities are renowned in this place. May we take as read much of the Government's standard position on the euro, so that we have time to address some of the substantive issues raised this evening, in particular the Chancellor's comments last week about the economic growth and stability pact? Can the Economic Secretary say whether the Government would be willing to recommend that we join the euro without reform of the growth and stability pact?

Ruth Kelly: I will come on to the growth and stability pact, but I believe that the hon. Gentleman welcomed the full answer that the Chancellor gave to his question at Treasury questions last week. As he knows, the Chancellor is committed to a prudent interpretation of the growth and stability pact which recognises the full role that public investment should play, as well as sustainability of the debt. He has argued strongly for that at ECOFIN and will continue to do so.
	On 4 November 2001, in his speech to the Confederation of British Industry, the Chancellor said:
	While the assessment has not yet started, the necessary preliminary analysistechnical work that is necessary to allow us to undertake the assessment within two years as promisedis underway.
	The Chancellor once again made it clear in his reply to the hon. Gentleman at Treasury oral questions last Thursday that
	after the first detailed assessment of the five economic tests in 1997, we said that our policy was to prepare and decide and to make an assessment early in the Parliament. The assessment of the five economic tests has not yet started, but last year we set out the necessary next stage of preliminary and technical work.[Official Report, 28 February 2002; Vol. 380, c. 823.]
	As I repeated in the Westminster Hall debate in January, the scope of the necessary preliminary and technical work was set out in the original October 1997 assessment. Although there have been new developments since then, the underlying issues to be analysed remain the same and the five tests themselves are unchanged.
	The Treasury released a paper in November last year entitled Preliminary and technical work to prepare for the assessment of the five tests for UK membership of the single currency. Hon. Members can find a copy of that in the Library of the House. It sets out some of the key parts of the preliminary and technical work, although it is by no means an exhaustive list as the preliminary work continues to evolve to take account of the latest technical research and analysis.
	Let me give some details of the work taken from the paper, as the Chancellor did at Treasury questions last week.

David Laws: How much of the preliminary and technical work has been done so far and when will it be completed?

Ruth Kelly: The Chancellor said that the preliminary and technical work is necessary to inform the assessment of the economic tests. We have committed ourselves to completing the assessment within the first two years of this Parliament, as the hon. Gentleman is aware. I have just stated that the nature of the preliminary and technical work is evolving to take account of the latest research and analysis. It would not be meaningful or right for us to give a running commentary on what stage that work is at, and I am not about to do so.
	However, it is worth setting out what the work attempts to achieve. It updates the analysis on the cyclical behaviour of the UK economy relative to the euro area and the relative responses to economic shocks; on the mechanisms by which product, labour and capital markets adjust, and how well and how quickly they work; on the impact of the single currency on the cost and availability of capital; on the effect of the single currency on financial services; and on the impact of the single currency on trade, competition, productivity and employment. As I noted in the Westminster Hall debate on the five tests in January, the Government have no intention of entering into a running commentary on the preliminary and technical work. However, we are committed to finishing the assessment within the first two years of this Parliament.
	The hon. Gentleman raised several questions about the nature of the preliminary and technical work. For instance, he asked who is involved in it. The Treasury is in regular contact with outside economists, the Bank of England and other Departments on a range of issues, including aspects of the work. However, it is clear that the assessment will be a Government assessment and that the work will be undertaken by the Treasury. There is no intention to contract out any part of the assessment.
	The hon. Gentleman also tried to ascertain how many Treasury officials are working on the preliminary and technical work. I am sure that he received my recent letter to him in which I stated:
	It would not be meaningful to quantify the numbers of Treasury management units involved in this work, since this would be only a number with no real indication of the resources allocated to the work.
	As each management unit is involved to a differing extent and in a variety of ways, to indicate the number of Treasury teams involved in the work by simply listing names would be misleading. The work is constantly changing and is updated to take account of the latest research and analysis. So the number of officials and the nature of the management units involved changes as the work evolves. Even if I could carry out a meaningful calculation to disclose the names of the teams and individuals involved, it would be only a snapshot which would be even less representative as the work progresses.

David Laws: I am very grateful to the Economic Secretary for giving way again. She reminds me of one of those graceful ships in the second world war whose job was to put up a big smokescreen so the convoy could escapebut she does it in a very glamorous and effective way. Before she finishes, will she tell us whether we will be informed that the preliminary technical assessment has been completed before we find out the result of the five economic tests? In other words, will we be told that the preliminary work has finished and then that the work on the tests has started, or will the results suddenly land on us from on high, perhaps on the front page of The Times, as happened in the previous Parliament?

Ruth Kelly: The hon. Gentleman knows that the Government have committed themselves to completing the assessment of the five economic tests within the first two years of this Parliament. We remain committed to that and nothing has changed, so in the remaining few minutes, it would be useful if I tried to answer some of his other questions.
	The hon. Gentleman was interested in the White Paper on European economic reform and asked whether economic reform was in some respects a sixth test for entry into the euro. It is not. We have always underlined the importance of economic reform in its own right; it is crucial to Europe's future success. The Government are determined to play a positive and constructive role in Europe, helping to deliver that reform. All member states now recognise the importance of such reform.
	The hon. Gentleman also referred to the European Central Bank and our views about the nature of its workings. We share the ECB's primary objective of ensuring price stability as a platform for high and stable growth and employment. We agree that the ECB must ensure that decisions are as transparent as possible and we welcome the efforts that it has made so far. We think that openness and transparency are key to ensuring that the ECB gains the trust of the European public and financial markets, and that that will ultimately help to provide the credibility that is needed to deliver a more effective monetary policy. We would not, however, somehow make reform of the ECB an additional test to our five economic tests or a precondition of the euro decision. We have set out our policy clearly: the five economic tests should be assessed and must be judged clearly and unambiguously before any recommendation is made to Parliament and the people.
	The hon. Gentleman also mentioned the growth and stability pact. As my right hon. Friend the Chancellor said in oral questions last week, we support prudent interpretation of the operation of the pact, but yet again, we would in no sense move away from the five economic tests that have been set out. It is clear what those tests are and we remain determined to assess them.
	The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.
	Adjourned at seven minutes to Eleven o'clock.